For small business owners, payroll filing can be a painstaking task, especially when the responsibility falls to one individual. It is a multi-tiered process that requires employee tracking, proper classification and filing legal documents on time.
Mistakes are easy to come by, so if the following errors are common to one's small business, it may be time to seek alternative payroll measures.
Incorrectly classifying workers can occur frequently, yet is still heavily penalized. Ensuring that full-time, part-time and contracted employees are correctly filed will prevent small businesses from being fined, writes AllBusiness.com.
Poor record-keeping and lack of document retention are two mistakes that can lead to payroll mismanagement. Not only should records be properly organized, but previous years' records should not be disposed of, AllBusiness.com recommends.
Improper payroll calculations not only lead to incorrect figures, but can also create disgruntled employees, particularly with hourly staff. Installing attendance tracking software can significantly diminish such mistakes.
According to IRS statistics, 40 percent of small businesses are annually penalized an average of $845 from the government. To avoid such costs, entrepreneurs should avoid these mistakes or consider outsourced payroll services.
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