Nobody wants to experience mishaps in their small business, especially if they’re new to the game. However, there are a number of common pay slip mistakes many people make when it comes to managing payroll.
We’re going to explore these mistakes, looking at how you can avoid them. We’ll also explore the different tools you can use to completely streamline the process. Let’s get into it.
Accurate pay slips are essential for small businesses for a range of reasons. Firstly, they help with financial tracking, while also making sure employees are paid accurately and on time.
Staff can see and understand the calculations behind their monthly wages, increasing transparency and ultimately employee satisfaction.
Finally, accuracy when filling out payroll ensures compliance with local labour laws. This means your small business stays above board and you don’t have to worry about any issues.
In order to guarantee accuracy, there are some pay slip requirements you must follow.
Every employer must include specific details when filling out payroll. This usually includes things such as employee name and address, payment details, tax deductions, payment period, and net pay.
This may differ slightly depending on your location, but these are the main components to consider.
As with most financial documentation, pay slips can be tricky. Let’s go over some of the common pay slip mistakes so you know what to look out for.
Missing mandatory details such as tax information, employee identification, and pay rate is common. There’s a lot to remember, so it’s easy to forget certain sections.
One of the best ways to avoid this error is by creating a checklist of all the details you need to include. Make sure your employees give you all the required information and double check once pay slips are complete.
Making errors when it comes to calculations is another common pay slip mistake. From deductions to adding up totals, there are a lot of numbers involved. If you’re working everything out manually, mistakes are bound to occur.
To avoid this, we’d suggest removing the manual element as much as possible. You can do this with pre-made pay slip templates or automated software. Both will take care of the mathematics for you, so you can maintain compliance.
Every country has local laws regarding pay slip compliance. For example, Singapore’s pay slip laws are made by the Ministry of Manpower. They insist all employers must issue itemised pay slips to all employees covered by the Employment Act. This could be submitted online or as a hard copy, including handwritten versions.
The latest rules for the Employment Act only came into force in 2016, showing how often local laws can change. The mistake many small businesses make is not keeping up with these changes. To tackle this, we’d recommend keeping your eye on business laws through online resources.
Finally, another common pay slip mistake is the issuing of late pay slips. This one is easy to make if you don’t have a strict schedule in place.
By setting up a scheduling system for your pay slips, they can be sent out automatically each month instead.
Let’s take a closer look at templates and payroll software to see how these online tools can help reduce the creation of mistake pay slips.
Using a pay slip template can help with consistency and calculations. Integrated formulas remove the need for manual calculations and your formatting will always remain the same. These benefits alone will help with compliance. Plus, you’re less likely to make mistakes if you use the same template every month.
Pay slip mistakes aren’t just limited to small businesses. Some of the largest companies in the world have faced the same issues on a larger scale. Here are some famous cases that we found:
These real-world examples highlight just how important it is to follow compliance rules. Each company could have avoided these problems if they stuck to local labour laws and took their time with checking everything.
As a small business owner, it’s essential that you understand the current pay slip requirements in Singapore. But how?
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.
