How to Correct Common Payroll Errors
Payroll mistakes can happen for many reasons in an organisation. If an employee has been paid incorrectly, pension benefits miscalculated, or an inaccurate payment sent to HMRC, it is important to quickly correct the errors. Here are some common payroll errors and how to quickly correct them and get back on track:
- Paid your employees the wrong amount or made an incorrect deduction:
You can update any payroll mistake on the next Full Payment Submission (FPS) sent to HMRC, or you can submit an additional FPS with the pay period field showing the difference in what was originally reported instead of the correct amount.
- Underpaid your employee: You must pay the employee the amount they are owed as soon as possible, and submit an additional FPS on or before the day you pay the employee. Determine why these errors have happened to ensure this type of issue does not continue. Employers who routinely pay employees incorrectly can face fines and penalties, and have employee retention issues due to payroll issues.
- If you paid HMRC too little or too much, you can correct this error in your next regular report. HMRC will add any underpayment to your next PAYE bill, or take the overpayment off your next PAYE bill. It is important to ensure you review your PAYE bill for any inconsistencies. You can receive an incorrect bill or duplicate payroll records if you have previously made a mistake when making a payment to HMRC.
Making sure your payroll is accurate is vital to the success of your organisation. Correcting errors and reporting to HMRC quickly will help to avoid penalties for non-compliance. If you are struggling to maintain payroll, reporting to HMRC, or need better control over your payroll processes, we can help. Our payroll technology with customised reporting makes payroll easy and compliant. We have a CIPP-certified staff to help when questions come up so you always have someone to talk to. Learn more about online payroll and how it can help your business.