Payroll errors affect a quarter of UK employees

If there’s one thing a business needs to keep workers happy, it’s an accurate payroll. When someone is paid too little, it naturally causes resentment. If they’re paid too much, it can lead to lots of hassle and begrudging repayments. Given this, it’s surprising to learn that a quarter of UK employees have suffered from payroll errors at least once.

Research into payroll errors

New research from the Global Payroll Association surveyed 4,248 UK employees. All of them received their income via PAYE.

The questionnaire asked recipients whether their current employer had ever given them an incorrect paycheque. 25% said they had.

Of this number, 78% said they had been paid too little. A further 19% said they had been paid too much. The final 3% said they had not been paid at all.

Worse still, 46% of employees said that they’d been given incorrect pay more than once.

The reasons behind payroll mistakes

The survey also sought to find out what caused payroll errors. The most common reason – in 46% of cases – was human error. Another 29% of payroll mistakes were caused by not including the correct bonuses or overtime pay. In 11% of instances, the error was due to incorrectly calculated benefit or other deductions.

The remaining errors were caused by the following:

• Incorrect reporting of taxable employee compensations (5%)
• Payroll software error (5%)
• New starters not getting their first paycheque (2%)
• Improper payment of disability or other deductions (1%)

How long it takes to correct payroll errors

Unfortunately, fixing payroll errors isn’t always quick. The research found only 13% of errors were corrected the same day. 16% were resolved in one to two working days. 16% took a week. In 56% of cases, it took over a week to solve the problem. Slow resolution also caused some respondents financial problems. Some 28% of people said payroll errors led to difficulties in paying bills or rent.

Are you at risk of payroll errors?

One thing that didn’t emerge from the research was the type of business most likely to make errors. While businesses of all size can make payroll mistakes, it’s a particular hazard for firms that don’t have as much in-house payroll expertise as they need.

This is where it can be a smart move to switch to an outsourced payroll service. This is something the THP has offered clients for many decades. It allows them to make use of our dedicated payroll experts and use state-of-the-art secure payroll software. It also helps ensure their payroll is compliant, quick and less prone to errors.

Put payroll mistakes behind you

As we’ve seen, payroll errors are surprisingly common. They can also lead to negative consequences. If employees aren’t paid correctly it can cause problems with trust and morale. It also costs time and money to put mistakes right. If you make errors relating to income tax and national insurance, it can also land you in problems with HMRC.

So, if you want to spend less time dealing with payroll hassles and more time growing your business, get in touch today. Our experts would be delighted to talk you through our outsourced payroll service.