How to Avoid These Common Pay slip Mistakes

Pay slip management is an important part of any small business. It guarantees your employees are always paid what they’re owed in a timely manner. 

Payroll must be submitted regularly and correctly to ensure compliance, but that doesn’t mean errors don’t occur. In fact, there are a number of common pay slip mistakes that can happen to any business.  

We’re taking a look at these mistakes to see how you can avoid them. We’ll cover essential requirements, real-world examples, and the different tools you can use to streamline the process.

Why Accurate Pay slips Are Essential for Small Businesses

If you're running a small business in the UAE, accurate pay slips are a necessity. They’re a legal requirement used when issuing wages, demonstrating to staff exactly what they’re owed for any completed work. 

They’re usually issued on a monthly basis and create complete transparency between you and your employees. If you forget to issue a salary slip, you will be in breach of local labour laws and risking compliance. 

Pay slip Requirements: What Every Employer Must Include

Which key pay slip requirements should every employer include in the UAE?

First, employee information such as name, address, and tax code are mandatory. You should also include any payment details, tax deductions, payment period, and net pay. Any pension contributions or benefits are also a must.  

Failing to include this information could result in non-compliance with local labour laws. So make sure you fully understand the requirements for your region.

Common Pay slip Mistakes and How to Avoid Them

Now, let’s take a look at some of the many pay slip mistakes for you to avoid. We’ll also make suggestions on some actionable solutions to these mishaps, so you can completely future-proof the process. 

Missing Mandatory Details

One of the most common pay slips mistakes is missing out any mandatory details. This could be because you’ve received incorrect information from your employee, or because you’ve simply forgotten to fill out a section. 

The fix is easy for this one. By creating a checklist of all the details you need to include, you’re less likely to miss anything. Include tax details, employee identification, and pay rate in your list and then tick them off as you go.

Errors in Calculations

There are a lot of numbers involved in payroll management, so miscalculating is an easy mistake to make. This is especially true if you’re doing all the calculations manually. 

To avoid this, we’d suggest using a pay slip template. There are tons of resources online offering premade templates with built-in formulas, making it easier than ever to complete payroll. 

Plus, it minimises the chance of errors occurring and helps to make sure you remain compliant. Alternatively, you could also use automated software such as QuickBooks to take care of the entire process for you. 

Non-Compliance with Local Laws

In the UAE there are a number of requirements for pay slips to be considered compliant. For example, pension fund contributions and employer-funded healthcare are mandatory. They will need to be outlined alongside any other benefits and all other legal requirements.

The mistake here is when small businesses fail to follow local laws or miss important updates. To tackle this, we’d recommend doing your best to keep up with any changes over the years. It’s not uncommon for the government to make amendments to this kind of documentation, even if it’s just the formatting of a pay slip. 

Not Issuing Pay slips on Time

Finally, another common pay slip mistake is the issuing of late pay slips. Again, this not only goes against compliance, it could also lead to dissatisfied staff. 

A good suggestion here is to set up a strict schedule and stick to it. When using dedicated accounting software such as QuickBooks, take advantage of automated scheduling to completely remove the worry over missed deadlines.

Tools and Tips for Error-Free Pay slips

We’ve already touched on some of the online tools available to help reduce mistakes in pay slips, but let’s delve a little deeper. 

Benefits of Using a Pay slip Template

By using a pay slip template you guarantee better consistency. Calculations are done for you with integrated formulas and your formatting always remains the same. Plus,  you’re less likely to make mistakes if you use the same template every month for every pay slip. 

Automating Pay slip Creation with Payroll Software

Alternatively, why not automate pay slip creation with dedicated payroll software such as QuickBooks. Our platform performs all the calculations for you, ensures timely distribution, and takes full control of your payroll process.

QuickBooks even understands the unique laws and regulations for your region, so you don’t have to worry about whether you're compliant or not.

Real-World Examples of Pay slip Mistakes

Some of the largest companies in the world have faced issues with pay slip mistakes. Here are some famous cases that come to mind: 

• Hearst magazine controversy: In 2013, interns sued Hearst Corporation for doing the work of regular employees without being paid for it. 
• John Lewis owes £36 million in back pay: UK retail chain John Lewis currently owes £36 million in back pay to its employees after underpaying them. This was down to “pay averaging” in which they tried to pay staff a consistent amount each month. However, this violated UK minimum wage rules.  
• Tom Hollander receives Tom Holland’s pay slip: In 2024, actor Tom Hollander revealed he accidentally received Spider-Man actor Tom Holland’s bonus pay slip due to an error in payroll.   

These real-world examples highlight how easy it is to make common pay slip mistakes. However, they were also easily avoidable. As long as you follow compliance rules in your region, you’re unlikely to join these famous cases. 

How to Stay Up-to-Date with Pay slip Requirements

Staying informed about local pay slip requirements in the UAE is essential when it comes to compliance. But how do you do it? 

First, keep an eye on any potential updates by subscribing to online government agencies, such as tax authorities. You could also sign up to newsletters or Google alerts on the topic of payroll requirements in your region. And do your research as often as you can, using reliable online resources. 

Another thing you could do is invest in payroll software to remain compliant and up-to-date. Tools like QuickBooks, automatically update their systems. So, if there are any changes in legal requirements, your pay slips will always reflect this. This includes formatting, changes in tax laws or tax brackets, and data updates.

Avoid Pay slip Mistakes with the Best Accounting Software in the UAE

Hopefully you know a little bit more about avoiding pay slip mistakes now. Even though they’re easy to make, they’re also easy to avoid as long as you have the correct procedures in place. 

Using dedicated accounting software such as QuickBooks can help to make the process even easier. It completely removes the hassle of payroll management and takes care of any legal updates, so you don’t have to worry. 

Stay compliant and simplify payroll today with QuickBooks.