As pumpkins and candies return to prominence, the time is nigh to indulge in tasty treats, carve jack-o’-lanterns and take in the spooky spirit of Halloween.
As you ward off evil spirits, there are something even scarier, which doesn’t just come around once a year – payroll processing errors.
As you go trick or treating, it is important to pay close attention to not just getting candies but also all your payroll inputs.
If you fail to process payroll properly, it could haunt you, not just on Halloween. So here are five reasons why payroll errors are scarier than any wandering spirits.
Payroll Calculation Mistakes can be SPOOKY
Calculating payroll can be very challenging. There are so many factors to consider before making payments. Other issues could result in inaccurate compensation, even though considerations like absence, time, and benefits impact the final salary that is being paid. Incorrect pay may result from, among other things, misclassifying employees, managing wage garnishments improperly, utilizing an outdated tax rate, etc.
What makes that eerie? In the USA, underpaying for overtime can cost you up to $1,000 for each infraction!
Compliance Game Can Be HAUNTING
Adherence to local laws and regulations is a critical aspect of processing payroll. Fulfilling federal, state, and local requirements before making payments is vital. Violating these laws could affect businesses and sometimes even put them out of business. Payroll deductions, tax withholdings, audit compliance, mandatory payroll reports, etc., are a few compliances that will differ depending on the country or region.
Payroll compliance violations can have severe ramifications – monetary penalties, interest on back taxes, and civil and criminal sanctions are just a few.
Getting your Tax Calculations Right Can Be SCARY
Employees are required to pay a portion of their incomes as taxes on their salaries, wages, and bonuses. Sounds simple? Well, taxes vary from country to country. While taxes are progressive and based on income rates in some nations, they are flat taxes in others. Some countries have the same tax rate yearly for all income brackets, while others may change it annually. Well, taxes may only exist in some nations!
The challenge grows manifold when dealing with a fragmented workforce.
Minimum Wage Calculations Can Be DEADLY
Countries have minimum wages that every employer must adhere to. States within countries could have different minimum wages. For instance, in the USA, the minimum wage in Oregon is $13.5, whereas it is $7.25 in North Carolina. In other cases, such as Denmark, certain nations do not have a minimum wage. The worker’s age might determine the minimum salary in some countries.
Determining the minimum pay for employees is challenging, and it becomes considerably more difficult when employees are based across various countries.
Global Mobility Considerations Can Be EVIL
The idea of seamless international travel is intriguing and becomes even more appealing when it provides the ideal work-life balance.
However, this might be the last thing that payroll providers would have hoped for. Why? Because global mobility places the payroll team in a tricky position where they must track where the employees are based. Taxes, adherence to minimum wage laws, and other compliances could vary depending on where they are. This is one instance where a minor error could have serious consequences.
ALSO READ | Country Spotlight: Payroll in South Africa
These are just some of the things that make processing payroll scary. Though payroll cobwebs are everywhere, one can be confident with the right payroll provider. This Halloween, ensure these cobwebs don’t stop you from paying your employees while staying compliant.
