As year-end fast approaches, the anxiety from the payroll department can be felt in the air. That is why BAASS is here to help guide your business through these stressful times. We have compiled a list of common payroll mistakes to avoid. Let BAASS save your business from making costly mistakes.
Not Knowing The Difference Between Exempt Vs. Nonexempt
Employees can either be exempt from taxation or not. However, failing to distinguish between the two statuses and misclassifying personnel is a common error made by businesses. In order to avoid this issue, it is important to understand the difference between exempt vs nonexempt employees.
Don’t Miss Your Deadline
Payroll practitioners should be keeping a close eye on their deadlines or they could run the risk of getting into trouble with the government and employees. Using a calendar, creating automated reminders, and routine calendar checks are great tips to stay organized. Tracking important dates, tax remittances, tax filing, visa renewal, and other payment obligations will help avoid penalties. Software solutions are great to consider if your payroll department is overwhelmed or short on staff.
Under and Overestimating Employee's Pay
Paying your employees incorrectly sounds like a nightmare, unfortunately, these situations do happen. Miscalculations impact the employee’s pay, but also any deductions and benefits that they might have. In order to avoid these mistakes, payroll practitioners should double-check tax rates, ensure overtime pay is accurately calculated, and understand how deductions work. Also, if you are manually entering payroll, please don’t forget to triple-check your calculations. BAASS offers a variety of solutions that can easily help you avoid this mistake.
Forgetting To Send Out Tax Forms
Many payroll practitioners experience extreme year-end stress, and because of this stress, it can be easy to become distracted by other responsibilities and forget to distribute tax forms to employees. Simply setting up reminders, or starting year-end planning early can help prevent this problem from occurring. The key is not to rush or you could miss important details.
There are various types of employee classifications, for example, part-time and full-time staff members, remote workers, temporary staff, and seasonal staff. Learn the distinction between an employee and a contractor in order to properly classify employees and prevent the two from being confused. Employee misclassifications are taken seriously by tax authorities because they can affect the individual EI benefits, Canada Pension Plan. and the Income Tax Act.
Keeping Up-to-Date with employment law and legislation
It can be a challenge to stay updated with employment laws and new legislation, but it is important for businesses to stay on top of these changes. The repercussions of not enforcing new laws and legislation can put your company in some serious hot water.
It is essential to comprehend tax and employment regulations in order to appropriately record the operations of your business. Misclassifications of employees or incorrect filings may result in fines, penalties, or even legal action. For your business to run well, you must ensure that you are adhering to the appropriate rules and regulations.
If your business doesn’t have a payroll department, it is essential that your employees become cross-trained to ensure that payroll is always taken care of in a timely matter. If you need help organizing your payroll department try contacting the experts at BAASS. Our BAASS expert's extensive knowledge will help guide your business in the right direction.