Payroll management is complicated, as there are several moving parts involved in paying employees correctly. Fortunately, you can invest in payroll management software to help you complete this essential task. If you don’t have a system in place, here are a few issues you may notice and how to avoid them.

4 Payroll Management Mistakes

1. Forgetting to Send Out Tax Forms

Anyone you pay over $600 a year must receive a 1099 form by Jan. 31 to comply with federal tax law. Additionally, all employees need to receive a W-2. It can be challenging to remember to send these tax forms at the end of the year, and your HR team may end up scrambling to send them if they don’t have the proper systems in place.

The best way to avoid this issue is to plan. Automate your tax forms process or make a calendar with important tax form guidelines to keep your organization on track.

2. Keeping Poor Records

The U.S. requires that employers hold at least three years of payment records, so keep these documents organized in case the government requests to see them. One of the best ways to stay organized is with an automated payroll management system—this allows you to keep old data backed up in cloud storage.

3. Calculating Pay Incorrectly

There are many complex factors that go into calculating an employee’s pay, including overtime, vacation days, commissions, deductions, and bonuses. This information can be difficult to manage.

If you pay an employee incorrectly, it’ll require ample time and effort to correct the problem quickly to avoid government penalties. While having an accurate spreadsheet can help with these issues, automating your payroll process can be an even better solution.

4. Classifying Employees Incorrectly

Some businesses misclassify their workers, failing to reward important benefits, like overtime pay and minimum wage, to all eligible employees. Assess an employee’s role in the workplace when they’re hired and periodically as their responsibilities increase. This will help save your business from having to pay fines from the government for missing taxes.

If you’re interested in an automated payroll management solution, turn to Aegis Payroll in Honolulu, HI. Their dedicated staff delivers payroll and HR solutions to commercial clients across Oahu, ensuring their payments are always accurate and on time. Their professionals have over 20 years of experience and even offer cloud-based applications to streamline your payroll processing. For more information about their services, visit the website or call (808) 593-0076.