Payroll Errors: How to Avoid Them and Why It Matters

How to Avoid Payroll Errors

1. Comprehensive Payroll Inputs: Regularly check and update employee records to avoid incorrect payments and tax errors
2. Attention to Detail by Payroll Specialists: Pay special attention when entering data to minimize typos and mistakes
3. Introducing a Schedule: Implement a strict payroll calendar that includes tasks, deadlines, and responsible persons throughout the payroll process
4. Payroll Draft Table: Provide clients with a detailed payroll draft that allows them to review and give feedback before finalizing payroll
5. Do not neglect these steps—any small error can cause serious issues later, and corrections may take significant time and effort

The Frequency of Payroll Errors

Throughout our work, we’ve encountered numerous payroll errors—fortunately, most can be prevented with proper attention. Let’s look at a few examples of the types of payroll problems these errors can cause.

The Importance of Comprehensive Payroll Inputs

On the client’s side, one common issue is incomplete payroll input, which can result in incorrect payments. These usually stem from missing or outdated employee records. For example, we may not be informed in time about a salary increase, absences may not be accurately tracked, or a change in a bank account number may not be communicated. Naturally, incorrect payments also lead to incorrect tax and contribution calculations. We’ve learned that retroactive corrections and self-revisions of tax returns are both time-consuming and cumbersome.

The Role of Payroll Specialists’ Attention

Another common issue is data entry error (typo), which frequently occurs during manual data input.

The Pressure of Deadlines and the Importance of Review

Payroll processing requires focus, and the beginning of the month is always stressful, as most companies want their payroll completed at that time. As a result, payroll specialists may feel they have “no time” for review due to tight deadlines—a response that is neither acceptable to clients nor reassuring. It’s extremely important that clients can also verify payroll lists and data.

How Can These Payroll Errors Be Prevented?

There is a simple solution: implement a payroll schedule (calendar) and ensure all parties follow it. The schedule should clearly outline tasks, deadlines, and responsibilities. It is also worth providing the client with a detailed payroll draft that they can review and test before finalization, allowing feedback-based corrections. Skipping these steps might save time initially but will lead to bigger problems later.