The Top Five Payroll Pitfalls

Employment trends expert explains how to circumvent common payroll problems

PayrollPayroll errors cost your company more than just time and money, they also gravely harm the trust between you and your employees.

“When payroll makes an error, even a small one, it can make a major impact on the employee’s personal life,” says Rob Wilson, President of Employco USA and human resources expert. “They may feel as though their effort isn’t respected or valued by their employer, and it can lead to very costly and pervasive issues like absenteeism and presenteeism.”

Wilson’s employment solutions firm, Employco USA, helps companies of all sizes with their payroll. “We work with companies who still take the old-school approach of handwritten timesheets and we work with companies who do everything electronically,” he says. “Many of our clients come to us after they have experienced expensive errors from doing payroll on their own. While it is possible to submit your own payroll via Quickbooks and other technology, outsourcing payroll can be a wise move especially as our political landscape continues shifting and requirements are changing.”

Here, Wilson outlines the top 5 mistakes which he has seen negatively impact companies’ payroll.

Lack of compliance with state and federal regulations. “Keeping up with the reciprocal agreements between states is really important, yet I have seen clients neglect this issue or be confused about how to approach it,” says Wilson. “For example, if you have an employee who lives in Indiana but works in Illinois, you need to consider which state takes precedent when it comes to payroll taxes.”

Late filings. “Filing late can be a risky move,” says Wilson. “If you send in your payroll taxes late, it is going to red-flag you to the IRS. They will think ‘Hmm, let’s look at what else is going on here,’ and suddenly your company may be looking at an audit all because you sent in your filings a week late.”

Angering the unions. “When it comes to paying the union, you have to make sure that your company dots every i and crosses every t,” says Wilson. “There is no grace period there. Even if the power goes out or you have technical issues with your bank, your union employees have to be paid on time and correctly.”

Void and Reissues. “If mistakes are made, they need to be rectified as soon as possible, but void and reissues can be complicated,” says Wilson. “For example, if a worker forgets to turn in a day of hours or their time is otherwise incorrectly tabulated, it can be very impactful. If they’re union, submitting the wrong hours could make them ineligible for health insurance the following month.”

Taxing expenses. “Whether we are looking at union agreements as it relates to parking costs, or taxation on relocation expenses, you have to check with multiple bureaucratic entities to make sure that you’re applying the correct taxes on these common expenses.”

For more on this topic, please contact Rob Wilson at