Six common payroll mistakes

An in-house payroll function for an SME business may feel like the simplest and most cost-effective option – but using non-specialists to process payroll data carries its own risks and costs.

As outsourced payroll specialists, our team is regularly called in to review payroll functions where an owner-manager runs the payroll himself, or delegates to another non-specialist member of the team. It seems relatively straightforward – processing data, running software, making payments and processing returns.

The result is processing without premium knowledge – simply running software or stats without understanding the broader implications, the detail of allowances, shifting levies, pension calculations and changes in the law.

There are six mistakes which we most commonly see and which, for any non-specialist running payroll, are worth checking you’re not making:

1. Incorrect use of M rate NI
2. Employment allowance not claimed
3. Apprenticeship levy not included
4. Incorrect calculation of pensions
5. Incorrect configuration of payroll software
6. Incomplete auto enrolment compliance processes

Our first task when called in to discuss an outsourced payroll option is to run a full audit. This enables us to identify issues, current and historic and put payroll on track before processing on an ongoing basis. It’s a process which can be massively informative for an SME owner – making savings and protecting them from legal liability – it’s why payroll clients generally stay with us for many years.

It is always worth having a health check on your internal processes to ensure you avoid fines or penalties in the longer term. At HWB we offer this free of charge, to give you peace of mind. If this would be of interest to your business, contact our Payroll specialist James Alesbury  on 023 8046 1222 for a no obligation chat.

HWB are specialist Payroll Providers, visit our service page for more information.