Managing payroll could pose a bigger challenge than expected. Depending upon your company size, you have several employees to track in distinct departments or divisions. It causes more confusion when your turnover increases with your business growth. Thus, businesses tend to make these payroll compliance mistakes that you should avoid.
- Not Fulfilling Paperwork Deadlines: Filing paperwork of employment is a critical thing for any business. Companies have ten to twenty days to finish the task. If you do not finish it within time, you have to suffer from unnecessary fees, audits, and harsh penalties.
- Official Payroll Lacking Payment Records: All money that you give to your employees should be recorded. There’s a dedicated book for that called the official payroll. Besides the regular income, you should also add commissions, gifts, and bonuses as income. Certificates and gift cards are also added and considered as cash.
- Misclassifying a Worker: Putting an employee in the incorrect category can put you in danger. Avoiding these types of errors is simple by being diligent regarding your record keeping. If you aren’t aware, workers generally fall in the categories of independent contractor, statutory nonemployee, statutory employee, and employees. Committing these errors in regards to wage reports and tax withholding can cause you penalties when your paperwork is filed.
- Falling Behind the Correct Employee Records: Irrespective of the type of industry you belong to, maintaining an employment record is essential. Here, accurate record management is important to your success. Thus, you should ensure to retain those crucial records for at least four to seven years.
For managing all such tasks and doing zero (to negligible) mistakes, you need to hire a professional accountant in Castle Hill.