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How to Avoid The Hidden Costs of Payroll Errors

how to avoid the hidden costs of payroll errors

The Growing Challenge of Multi-State Payroll

Business owners, CFOs, and HR professionals know how complex the payroll process can be. When your company hires employees that live across multiple states, however, it becomes even more challenging.

 

Varying tax regulations and location-specific wage laws make it difficult to remain compliant. The rise of remote work means these complexities are becoming even more prevalent, ultimately costing companies time and money.

 

The administrative burden of multi-state payroll can lead to costly errors—particularly for small businesses. Professional employer organizations (PEOs) step in to alleviate some of that pressure by handling administrative tasks like payroll management. This means growing companies can stay focused solely on running their business.

 

Let’s take a closer look at multi-state payroll compliance, why traditional payroll may not be the right choice for your company, and how PEOs help simplify the payroll process.

 

Understanding Payroll Compliance Across State Borders

If you’re a small business owner, hiring remote workers means having the ability to access a larger pool of talent beyond your specific area. This can be incredibly beneficial for your business, but it also comes with challenges.

 

One of the biggest challenges companies should consider when hiring talent across state borders is remaining compliant with rules and regulations regarding payroll. Not only do these laws evolve constantly, but they also tend to vary from state-to-state. If your company falls out of compliance, you could be faced with hefty fines and penalties.

 

When hiring workers across multiple states, it’s important to keep in mind that state income tax rates, unemployment insurance requirements, wage and hour laws, and benefits mandates will vary depending on where your new employees are located. Keeping up with those regulations can be especially difficult for smaller businesses or companies without a human resources team.

 

Why Traditional Payroll Systems Fall Short

Traditional payroll systems typically handle one-size-fits-all scenarios. While they may process paychecks efficiently, they may not take multi-state payroll compliance into account.

 

In many cases, generalized payroll processing can lead to miscalculated tax withholdings, late or inaccurate state filings, or noncompliance with state wage laws.

 

How PEOPayGo Makes Multi-State Payroll Easy and Accurate

From streamlining payroll and ensuring compliance to flexible pay-as-you-go programs and expert support at your fingertips, PEOPayGo makes multi-state payroll easy and accurate.

 

1. Payroll Compliance

PEOPayGo specializes in understanding and keeping up with state and federal rules and regulations when it comes to payroll. No matter where in the United States your workers are located, PEOPayGo ensures that your business will remain in compliance with those laws.

 

2. Streamlined Payroll Processes

Beyond remaining compliant with state and federal regulations, a streamlined payroll process is essential to keep employees happy and your company thriving. PEOPayGo’s platform simplifies the entire process, from onboarding new employees and time tracking to tax filings and benefits management. Automating your payroll processes with the help of PEOPayGo also ensures that it’s done accurately and on time.

 

3. Expert Support

The team of experts at PEOPayGo is always available to help with what you need—whether you’re unsure of how to handle an employee moving to another state or you’re trying to understand varying wage laws. When you partner with PEOPayGo, you’ll receive the support you need as a small or medium-sized business.

 

Simplify Payroll with PEOPayGo’s Multi-State Expertise

Managing payroll across multiple states can be complicated, and as a small business owner, you likely have a lot on your plate already. It can be difficult to keep track of varying wage laws by state, especially when rules and regulations are constantly changing.

 

When you work with PEOPayGo, you can rest assured that your business will remain compliant with state and federal regulations when it comes to payroll. Not only will you receive compliance support, but you’ll have streamlined payroll processes to help your organization simplify and thrive.

 

If you’re a business owner or HR manager with multi-state or remote employees, reach out to PEOPayGo today to get the payroll support you need.

 

Contact us today to get the coverage and support you need!

The Impact of Payroll Errors on Businesses

Payroll errors can have a major impact on businesses. They can lead to increased employee turnover, decreased productivity, financial losses, tax penalties, and much more. Understanding payroll errors and the impact they can have on businesses is crucial for helping to avoid mistakes. If you’re a business owner or HR manager, it’s important to have a plan in place to help ensure payroll accuracy.

Let’s take a look at some of the common payroll mistakes and their consequences, as well as how PEOs can step in to offer compliance support and help businesses avoid costly errors.

 

Common Payroll Mistakes and Their Consequences

Paycheck mistakes can be costly for any organization. With a better understanding of what these errors are, however, it can be easier to avoid them.

 

1. Misclassifying Employees

Classifying employees correctly is essential when it comes to payroll processing. As an employer, it’s crucial to understand the difference between employees and contractors, and to know which is the accurate classification for your workers. There are certain rules and regulations when it comes to overtime pay and benefits that may apply to some workers while others may be exempt. Incorrectly classifying your employees can lead to legal repercussions, IRS audits, and a decrease in employee morale.

 

2. Incorrect or Incomplete Records

Managing payroll records manually can leave lots of room for error as well. As a business owner or HR manager, you likely have your hands full with work. Keeping track of spreadsheets and employee pay can be incredibly overwhelming. Incomplete payroll records can lead to underpaying employees as well as falling out of compliance with state and federal tax laws.

 

3. Miscalculating Wages and Overtime Pay

Miscalculating wages and overtime pay isn’t uncommon when it comes to manually processing payroll. It can be difficult to accurately track employee hours and overtime when you have so many other tasks on your plate. Underpaying employees can reflect poorly on the company. Overpaying them, however, can be just as detrimental to morale—as you’ll be expected to ask for that money back.

 

4. Missing Expenses

Whether it’s due to data entry errors or employees filing their expenses too late, these missing expenses can have an impact on your business and its compliance with state and federal laws. Overlooking reimbursable expenses not only leaves your employees feeling frustrated, but it also creates more work for you to do after the fact.

 

5. Submitting Taxes Incorrectly

Manually processing payroll leaves room for human error in tax submission. Whether an employee was incorrectly classified initially or wages were miscalculated, tax mistakes can result in issues with the IRS, penalties and fines, as well as time spent backtracking to fix these errors.

 

How PEOs Help Prevent Payroll Errors and Ensure Compliance

Professional employer organizations—PEOs—step in to handle the administrative tasks for your business. If you own a business, it’s likely that your focus will need to be in other areas, so having payroll experts to support you can be incredibly beneficial.

 

1. Streamlined Payroll Processing

Essentially everything a PEO offers can help to streamline payroll processing. PEOs are experts in the field, and they utilize specialized payroll software to help simplify the process and ensure accuracy. Time tracking, overtime pay, benefits, and paid time off can all be managed in one place, and then integrated together.

 

2. Expertise in Compliance

PEOs have made it their mission to know all about state and federal tax and labor laws. These rules and regulations can be incredibly complex and take time to fully understand. PEOs expertise in compliance can help you save money in the long run by avoiding potential fines and penalties.

 

3. Utilizing Automation for Accuracy and Efficiency

When you work with a PEO, employees will have their own portal to access and adjust their information. This eliminates the need for manual data entry on your part as an employer to help reduce human error. Automation also means employees will get paid on time every time.

 

Simplify Payroll with PEO Services

If you’re ready to eliminate payroll errors, ensure compliance, and boost employee satisfaction, PEOPayGo is here to help. Our trusted PEO services simplify payroll, deliver accurate paychecks, and give business owners and HR managers peace of mind.

Contact us today to streamline your payroll and keep your team happy!

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