There’s something lurking in your payslips, seeping into your payroll reports and sending shivers up your spine. It’s the rise of the payroll horrors that will come back to bite you in 2024.

One spooky statistic is that 88% of businesses suffered payroll errors in 2022 resulting in late pay for employees, that’s enough to give your team a fright!

So let’s explore which payroll mistakes you’ll want to swerve past in 2024.

1. The monsters lurking in your mistakes

Wrong NI bands being used, inaccurate tax codes, you name it. There are several ways that payroll errors can creep into your employee’s payslips. It’s easy to miss something that can have HMRC knocking at your door.

For example, getting NMW (National Minimum Wage) wrong can result in a minimum penalty per notice of £100 up to £20,000 per worker!

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Here’s some ways to tackle it:

Extra payroll reporting – Conducting extra reports can help you during the approval process. For example, spotting when a tax code has been changed or if they are eligible for a new National Minimum Wage band. Many of our outsourced payroll customers have been opting for month-on-month comparisons and tailored reports to spot things quickly.

• An extra step in your process – Put extra spot checks in place with your payroll team so they can check for likely changes.
• Onboarding process – Work closely with your HR team to make sure data collected when new starters join is accurate.
• Avoid burnout in your payroll team – Inhouse payroll teams can often be tripped up by busy periods and P11D deadlines. Make sure your team has right resources to prevent avoidable mistakes and seek outsourced payroll support if you need some extra support.

2. Employee Time Tracking

The ghost in your system

Everyone knows when you lose sight of the monster that’s when you’re really in trouble on Halloween night. Employee time tracking often falls under your HR function but with flexible working and sectors such as logistics, tracking hours is not always straightforward.

What is clear is failing to track hours properly can lead to lots of money…flowing out of your organisation in the form of fines. PNC Bank recently agreed to pay $2.75 million due to allegations certain staff were not being fully compensated for overtime work.

Here’s some tips:

• Clear HR policies – Make it abundantly clear if employees can charge for overtime and if there’s a maximum, also consider H&S around lone working, working too many hours and more to avoid HR related fines too!
• Transparent tracking – Use clear payroll systems and smooth processes to ensure employee time tracking is clear and any missing detail is raised quickly by line managers.

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3. GDPR non-compliance

A ghoul that doesn’t such haunt marketing departments

GDPR isn’t just something your marketing team need to watch, it’s a very real threat for payroll teams too. Stay compliant with these tips:

• Checking personal details – Use verification to check addresses for post or digital payslips and store sensitive data securely.
• Password protection – When sending information digitally use passwords.
• Conversations – Ensure payrolls conversations are private and can’t be overheard in a busy offic.e
• Security – Ensure you have data security in place to protect against cyber security breaches.
• Leavers – You need to keep payroll records for 3 years from the end of the tax year so HMRC can check records if they need to.

4. Payroll legislation changes

The shape-shifting banshee

Not staying up-to-date with payroll legislation is likely to land you in hot water quickly. When faced with a foe whose abilities change you need new ways to outsmart your enemy.

Luckily payroll changes in legislation often work for good, whether that’s providing extra paternity leave for new fathers, raising National Minimum Wage or auto-enrolments for over 18s.

Explore payroll changes for 2024 and beyond

However, this can cause problems if you don’t stay up-to-date, and with many bills working their way through parliament it’s easy to be caught out. Here’s what to do:

• Stay alert – Use trusted sources like CIPD. In our blog, check out the changing 2024 payroll legislation here.
• Budget accordingly – Forecast how payroll legislation will effect your business finances. For example, changes in NMW has a noticeable effect on large organisations.

5. Implementing Payroll Systems 

Glitches in the matrix

Ah the joy of implementing new payroll systems. It’s enough to have you flocking to a cave to live out your days away from technology. 

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Workplace technology can cause several mishaps from AI tech confusing customers to new payroll systems sending out the wrong data. So, what can go wrong when implementing a new payroll system? 

• Security risks – Often data has to be stored by a third party so you need to consider how this will work and minimise the risks. 
• Potential added costs – Check contracts to watch out for hidden charges which can balloon.
• Data quality – Payroll systems are only as good as the information you put in, inaccurate data has been plaguing payroll systems for many years, don’t let it be you.
• Consider your options carefully – Consider if the ROI for using a payroll system is worth it or whether using an experienced outsourced payroll provider may give you what you want and more.

6. Reputational damage

When the monster turns out to be YOU

There’s nothing worse than staring in the mirror and seeing a werewolf staring back at you. Well, that may happen, metaphorically, if you don’t pay attention to what your payroll data reporting is tell you.

For example, if you neglect to accurately keep track of gender pay reporting it’s not just a fine that will be coming your way. This can result in losing out on top talent who don’t see you as a progressive employer.

• Plan ahead for deadlines – Stay ahead of once-a-year deadlines such as P11D and gender pay reporting. Record the data as you go through the year as it may be hard to collect retrospectively.
• Watch your size – Larger companies often have more reports that they need to submit than others, if you are rapidly growing then keep an eye on these extra responsibilities.
• Act proactively – Even if you are too small to have to report gender pay gaps. You can stand out as an employer.

7. Not getting enough payroll support

Don’t fight the vampires alone!

Trying to handle payroll yourself, P11Ds and other busy periods during the year can be a real problem for your team.

• Assess if you need outside support – If you haven’t got an inhouse payroll team weigh up hiring an inhouse payroll professional vs outside considering things like experience, domain experience and more.
• Choosing the right outsourced payroll provider – We’ve written a useful blog sharing what to look for in a payroll provider, you can always reach out if you have any questions.