Many businesses get pay wrong without being aware of it. But pay or payroll errors are a major financial and legal risk, so you need to know where you could be going wrong and ways to stay compliant. This article covers the most common pay mistakes.
Getting pay or payroll wrong is a major financial and legal risk. Business owners and management are ultimately responsible for any pay mistakes and their consequences, which could be a hefty fine from a Fair Work Ombudsman Inspector, or the Australian Taxation Office, as well as any interest and legal fees.
Mishandling pay can also harm employees’ trust and confidence in the business, which can end up sapping morale and damaging your reputation.Unfortunately, pay errors aren't rare. A 2018 study estimated 2.4 million Australian employees could be affected by payroll underpayments, at a cost of $3.6 billion.
The combination of good payroll and HR systems will help reduce mistakes and non-compliance, and will make it quicker to identify and resolve any issues.
Here are some common pay errors to watch out for:
This article goes into common pay and payroll mistakes in more depth.