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Common Payroll Problems And How To Avoid Them

avoiding problemsAll employees come into work to get their job done and get paid. For small businesses, the getting paid part is sometimes problematic. Payroll is fraught with potential pitfalls. The following are a few of the most common problems and how to avoid them. Notice that outsourcing the work to another company is often the solution.

Overtime Pay

Federal law prescribes that individuals who work more than 40 hours per week must receive pay equal to one and a half times their usual rate if they are hourly workers. Those who are on salaried pay may not qualify for bonus pay. These regulations sometimes cause confusion in the payroll department.

Tabulating the exact number of hours worked as overtime as well as the correct rate of pay for those hours is a challenge. An outside source can easily keep track of relevant regulations and adjust paychecks according to what is duly owed to the individual worker.

Minimum Wage Requirements By Jurisdiction

To add another layer of complication to the payroll mix, different jurisdictions have different minimum wage requirements. The current federal minimum wage is $7.25 per hour, but that is not necessarily the minimum wage in every state or city. Exaktime.com explains how to tackle this issue,

If you’re hiring someone in a different state or country, make sure you or your payroll manager is familiar with tax and employment law in that area. States often have their own versions of laws that differ just enough to cause headaches when paying employees or paying taxes, but it is the business’s responsibility to figure them all out.

Again, having an outside source to provide assistance with this matter is advisable if one can afford it.

Automating The System

Unless a small business owner can afford some advanced payroll processing software, he or she may struggle to get payroll out in time. Obviously, this is a major snag in the operation. Employees must receive pay on time in order to continue to show up for work. It may even break some labor laws to not pay them in a timely manner.

Outside providers have already invested in the software to handle payroll operations quickly and easily. This means that those who want to leverage their services can discover an easier way to ensure that payroll is always going out on time.

By |2015-04-21T00:00:00+00:00April 21st, 2015|Blog, Uncategorized|0 Comments

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