Payroll Blunders and what to do next.

Payroll is the financial lifeline of any UK business, ensuring that everyone gets their hard-earned cash on time is super important to employees. Yet, despite the best intentions and meticulous planning by payroll teams, payroll mistakes happen, and when they do, the results can be both frustrating and time consuming to resolve.

Join me on a journey through some common payroll blunders in the UK, complete with professional insights and a touch of light-heartedness.

The Timesheet Tangle

One of the most frequent payroll errors arises from timesheet troubles. Employees forget to log their hours correctly or at all. You’d think we were asking for a handwritten manuscript instead of a simple digital entry. The result? Payroll professionals are left playing detective to figure out if Bob from Sales really did work 36 hours of overtime in one week. Spoiler alert: he didn’t, he never works overtime!

Stewarts tip: Implement automated timesheet reminders and user-friendly digital platforms to ensure accurate time tracking. Clear communication about the importance of timely submissions can also go a long way.

The Tax Code Conundrum

The dreaded tax code change can throw a wrench into even the best payroll systems. One day, employees are happily paying their taxes, and the next, their payslip looks like it’s been hit by a Liz Trust budget. Employees find themselves wondering why they’re suddenly paying more in tax than they’re taking home. The culprit? A mysterious and incorrect tax code.

Stewarts tip: Regularly review and update employee tax codes. Establish a direct line of communication with HMRC to promptly address and rectify any discrepancies.

The Payment Pickle

Nothing quite matches the horror of a direct debit gone wrong. Picture this: Jane from development gets her salary, but John from IT doesn’t. Or worse, John’s salary ends up in Jane’s account. Cue the panic, confusion, and a lot of awkward conversations. “Hey Jane, do you mind transferring that back?”.

Stewarts tip: Meticulously double-check bank details before processing payroll especially on new starters or employees that have been made leavers and starters on new PAYE schemes. Consider conducting practice runs to ensure accuracy and prevent mix-ups or better still import to save time and spend more time checking the output.

The Overtime Oversight

Overtime pay is a welcome reward for extra hours worked, except when it’s forgotten. Employees log the additional hours expecting the extra nice bonus on their next payslip, only to find the payment hasn't been made.

The payroll team, meanwhile, is blissfully unaware of the impending office revolt. Not good for internal engagement scores with staff.

Stewarts tip: Implement a robust system for tracking and approving overtime. Ask someone to check that overtime has been paid as per the claims.

Promptly address employee concerns about missing pay - they’re usually right.

The Benefit Blunder

Benefits are a fantastic way to keep employees happy, but they can also be a minefield. From childcare vouchers to cycle-to-work schemes, it’s easy to mix things up. Imagine signing up for the gym discount only to find your payslip showing deductions for a service you’ve never heard of (which actually happened to me). Fun times.

Stewarts tip: Maintain clear communication and detailed records of all employee benefits. Regularly review and update benefit information to prevent misunderstandings.

The Payslip Puzzle

Payslips should be straightforward, but often they’re more like cryptic crosswords. Employees trying to understand deductions can feel like they’re deciphering the Rosetta Stone. Rosetta Stone - Wikipedia

“What’s this deduction for £50? Oh, it’s for the Christmas party we had in June.”

Stewarts tip: Simplify payslip information and ensure transparency. Clearly explain each deduction and its purpose to employees. Add payslip comments if your software allows this, very helpful to employees.

The Holiday Pay Hiccup

Holidays are meant to be relaxing, but a holiday pay mistake can ruin the mood faster than you can say “staycation.” Whether it’s underpayment or overpayment, getting holiday pay wrong leads to confusion and frustration. Employees returning from a break expect to find their finances in order, not an unexpected deduction.

Stewarts final tips: Track holiday accrual and pay if you can. Ensure payroll staff are well-versed in holiday pay regulations and practices.

Payroll mistakes are an inevitable part of working life, but they don’t have to be a complete tragedy.

With attention to detail, regular checks, and clear communication, most common pitfalls can be avoided. It's all about how you manage any payroll issue that is key to the success of ensuring a good result for the client and employees.