If you employ workers, then payroll is of the utmost importance. The complexities of the process can make payroll challenging. For that reason, many companies turn to professional payroll services. Here's a closer look at the issues avoided by choosing a certified company to handle payroll. 

4 Common Payroll Mistakes

1. Classifying Workers Improperly

Every employee is given a specific classification for legal purposes. The two standard statuses are exempt and non-exempt. These categories delegate how wages and taxes are handled. For example, Non-exempt employees are entitled to overtime, while exempt team members are not. 

2. Not Updating Tax Rates

Tax laws are ever-changing. Your payroll services need to deduct from your employees’ paychecks federal income, Social Security and Medicare taxes, and state and local income taxes. Failure to stay on top of the latest tax rates results in withholding the wrong tax amount. This situation imposes fines and penalties for both your company and your employees. 

3. Poor Record Keeping

The tax system relies on a few key pieces of information: legal names, Social Security numbers, birthdates, and addresses. These details must be correct in your records so that there's a proper paper trail. If you're audited or an employee disputes their wages, you’ll be able to verify the information requested. 

4. Overlooking Bank Holidays

Remember that bank holidays interrupt pay schedules. For instance, if Thanksgiving falls on a Friday, then paychecks won't be authorized until the following Monday. To ensure employee satisfaction and avoid frustration, adjust your payment schedule accordingly. If you're working with a professional payroll service, they'll notify you ahead of time to make the arrangements. 

Avoid payroll mistakes by putting it in the hands of the professionals at Talent HR Solutions in Honolulu, HI. Since 2003, the company has worked with local Oahu businesses to make their daily operations more efficient and convenient. Along with handling wage payments, their skilled team is able to handle all of your human resources and staffing needs. Learn more about the specifics of their payroll services online and request a personalized consultation by calling (808) 354-0498.