As a small business owner, it’s your job to ensure that all of your employees get paid what they deserve and that they receive their pay on time. That said, managing the payroll for an entire company, no matter how small, is generally easier said than done.
Here are four common business payroll mistakes small businesses often make and how you can avoid them.
1. Forgetting Payroll Taxes
Once you pay your employees, you’re done with payroll — right? Well, not quite. One of the most challenging parts of starting your own small business is figuring out the tax side of things, including payroll tax.
Assuming all of your employees aren’t independent contractors, it’s you’re job as their employer to sort out, deduct, and submit payroll tax with every paycheck. If you overlook payroll tax, you and your company will have to make the difference come tax time — and that could cost you big time.
2. Information Errors
To err is human. And while you move on from most mistakes with a simple apology, payroll mistakes could be much more costly in the long run.
Slight errors, such as misspelling a street name or mixing up a single digit on a form, could be the difference between an employee getting paid on time and having to pay a fine. So, when entering a new employee into your payroll, make sure you take your time and double-check everything just in case.
3. Overlooking Holidays
Bank holidays are often a much-needed break for you and your employees. But, if you don’t plan properly, they could wind up causing significant financial issues for you and your employees.
Depending on which bank you use and how you process payroll, bank holidays could prevent your paychecks from going through, leading to your employees getting paid much later than usual. And while a couple of days may not seem like a huge deal, it could mean the difference between paying on time and racking up late fees.
So, when handling payroll, make sure you keep track of bank holidays and plan your payroll around them accordingly.
4. Not Providing Pay Stubs
Providing your employees with proof of income isn’t just beneficial for them — it’s a way to protect yourself and your business.
Sure, pay stubs will allow your employees to prove income and employment if they ever want to take out a loan or rent a new apartment. But, on top of that, they provide your business with instant evidence just in case an employee claims you short-changed them.
Fortunately, creating pay stubs for your employees has never been easier. Have you seen the sample pay stubs? There are dozens of sites, software, and resources to help small business owners create and track pay stubs for all of their employees.
How to Handle Small Business Payroll
Now that you know a bit more about the most common business payroll mistakes you can make as a small business owner, you’ll be able to avoid making them.
Are you looking for more advice on how to manage and grow a small business? We’ve got you covered. Check out the rest of our blog for more helpful articles and advice today!