Payroll is an essential aspect of any business and one which is important to get right. Whether you are running payroll for the first time as a new business or if you have decided to begin to run your payroll in-house, having previously outsourced to a payroll bureau; here are six common mistakes to watch out for when processing payroll.
Payroll mistake 1: Not complying with HMRC
When you run payroll, you need to report payroll information to HMRC. You may be charged penalties if you do not report the correct information to HMRC or if you do not submit the information on time. It is necessary that you use a HMRC recognised software that can report PAYE information online and in real time, known as RTI. Using a HMRC recognised software is needed for:
- Recording your employees’ details.
- Working out your employees’ pay and deductions.
- Working out any statutory pay your employees’ may be entitled to.
- Working out how much you owe to HMRC.
Payroll mistake 2: Not complying with GDPR
When processing payroll, you are dealing with a lot of personal information. Using a GDPR compliant payroll software means you and your employees can rest assured that all personal data is stored and managed in a safe and secure manner.
Payroll mistake 3: Not complying with automatic enrolment
It is a legal requirement for employers to enrol eligible employees into a workplace pension scheme which both the employer and the employee will contribute to. There are certain auto enrolment duties that employers must carry out in order to be fully compliant. Some of these duties are once off actions and others are ongoing duties which involves monitoring changes in your employees age and earnings. Every three years, employers must carry out the re-enrolment of any staff who may have left the scheme.
Payroll mistake 4: Not backing up payroll data
When running payroll, it is highly recommended that you always keep a backup of all payroll data. It is also advised that this back up is saved somewhere other than on the hard drive of the computer you use to process payroll. Using a cloud platform or an external device to back up data is the safest option to ensure you never lose valuable information, should something happen to your computer.
Payroll mistake 5: Having inexperienced or untrained staff run payroll
While using the right software has made processing payroll easier than ever before, it is still not something that should be assumed is easy and straightforward to do. When staff running payroll are inexperienced or untrained, you are leaving your business open to problems like employees being paid the wrong amounts, penalties for non-compliance, time wasted correcting errors and overall damaging your reputation as a business. It is also important staff keep up to date and informed with any changing HMRC legislation or employee entitlements.
Payroll mistake 6: Inefficiency and human error
Your efficiency when running payroll will depend greatly on the level of automation used. Automation cuts down on the repetition of uncomplicated tasks. Automation not only saves your business time and money by allowing you to process payroll quicker, it also does so by reducing the possibility of human error. A payroll software must be used to automate payroll processes.
How to avoid common payroll mistakes
You have two options when it comes to avoiding these payroll mistakes:
- Option One: Outsource your payroll to a professional.
- Option Two: Choose a payroll software that ensures all these mistakes are easily avoided.
While outsourcing your payroll duties to a professional might seem like the simplest option, it may not be the most cost effective one. You can save money while having the same peace of mind that your payroll is correct by running your payroll in-house with the right payroll software.
BrightPay is a multi-award-winning cloud payroll software that automates payroll processing. BrightPay’s integration with HMRC, accounting packages, pension providers and payment platforms automate payroll tasks while also ensuring that you can easily stay compliant.
BrightPay will automatically add legislation in the background while you work. It assess new employees for auto enrolment each pay period and inform you of which employees need to be enrolled. Our software will then continue to monitor staff and inform you of any changes in eligibility, giving you peace of mind that all your auto enrolment duties are taken care of. BrightPay even automatically prepares customised letters which employees must receive, informing them of their auto enrolment rights.
When it comes to GDPR, BrightPay helps you stay compliant by offering a secure online portal for employers to share payslips with their employees as well as other HR documents.
Why not book a free demo today and discover how BrightPay can help you avoid payroll mistakes and make processing payroll a breeze.
