Short List: Payroll Issues

Some problems met while doing payroll bookkeeping:

1. Incorrect calculation of employee pay, such as miscalculating overtime pay or failing to account for deductions.

2. Failure to accurately track employee hours worked, leading to incorrect pay calculations.

3. Incorrectly classifying employees as exempt or non-exempt for overtime pay purposes.

4. Failure to properly withhold taxes, leading to potential fines and penalties from the IRS.

5. Failing to comply with state and federal laws regarding payroll and taxes, such as failing to provide required forms or failing to make timely payments.

6. Inadequate record keeping, which can make it difficult to track employee pay and deductions and to respond to audits or other inquiries.

7. Incorrectly calculating benefit deductions or failing to enroll employees in benefits plans.

8. Incorrectly processing payroll payments, such as paying employees late or failing to make payments altogether.

9. Lack of internal controls and segregation of duties can lead to fraud or errors.

10. Inability to handle complex payroll regulations, such as handling various pay scales and pay grades or dealing with different types of employee compensation.