Common payroll errors

A recent Alight report ranks Spain 15th in terms of payroll complexity. This complexity has reduced in recent years, as we were ranked 4th in 2021. However, the report still shows that the payroll process is a complex task to perform. Now let’s take a look at the most common payroll errors and how to fix them.

Incomplete or disorganised records

Many of the problems when processing payroll come from employee records. Having incomplete, out-of-date or incomplete employee records can lead to errors due to misclassification of employees, incorrect pay calculation or poor overtime updating.

To prevent these problems from becoming a problem in the future, a well-organised system is necessary to keep this data up to date. Constantly updating this database will help us to avoid making mistakes in payroll processes. In order to do this, it is necessary to have the cooperation of the employees. Helping to update the data or informing them if they detect a mistake is a way of preventing these errors.

Payroll miscalculation and missing key deadlines

Payroll calculations require a lot of data to be taken into account. As a result, manual calculations can lead to errors at some point. Repetitive and mechanical processes are boring and can lead to a loss of concentration. This loss of concentration often leads to errors in accounting for a piece of information, or failure to enter it where it should go, resulting in an incorrect payment, either overpaying or underpaying.

This error has an easy solution: automation. If we have software that does the mechanical processes for us, we eliminate this type of error. All you have to worry about is indicating where each piece of information has to be extracted from, and the programme will apply the procedures automatically. This also saves time, as the hours saved can be reinvested in other tasks.

Failure to declare all forms of taxable remuneration

Employers are responsible for declaring all forms of taxable remuneration of employees. This means that payslips must identify not only salary, but also other forms of remuneration such as bonuses or stock options that may accrue to the employee. Failure to do so can lead to legal sanctions and damage to employee morale. To avoid this being a problem, it is important to be aware of taxable profits and to ensure that forms of remuneration are correctly declared.

Not keeping up to date with legislation

Employment and financial legislation is constantly changing and being revised. This instability forces us to be aware of all changes that affect the payroll process. Failure to do so can lead to miscalculations or not being able to provide accurate information to employees.

In addition, payrolls contain personal data, which is also subject to strict legislation. To prevent this data from ending up in the hands of unwanted third parties, data protection policies are also frequently updated. Keeping up to date with these changes is the only way to avoid making mistakes.

Outsourcing payroll saves work and hassle

Payroll outsourcing is the most direct solution to all these problems. If we outsource these processes, we take a lot of work off the shoulders of HR departments. Leaving your employees’ payrolls in expert hands is a way of making sure that we have everything in order, eliminating worries about filing deadlines, legal modifications and other problems that may arise.

At Vasalto, we have been working in payroll outsourcing for more than 30 years. This means that we have extensive experience in the sector, in addition to a series of our own computer systems that allow us to manage more than 40,000 payrolls every month. In addition, we also have the best legal and accounting advice, to offer our clients the best possible service.

If you are interested in finding out more about payroll outsourcing, at Vasalto we will be delighted to help you. Contact us to get to know us and see how we can help your company.