You might be using a free paystub generator online for quite long or maybe you’re a newbie. Even if it seems an easy task to pay employees, some common yet costly mistakes can still happen.
Erroneous paychecks affect a company’s reputation and might get the firm into trouble with the IRS.
We’ve thus pointed out some common mistakes and also provided ways to avoid them. Here you go!
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Seven Common Mistakes to avoid with Paystub Creator
Paying Incorrect Amounts
You may feel like this is common sense to pay the right amount to the employees and which employer will pay more or less mistakenly? But yes, it happens and more easily than you can think.
Two things should be taken care of: the paid amount & the hours worked. This should be initially set-up correctly in the system else the paycheck can turn out to be an error.
Not sure about the Pay Period
Most US states have a law regarding the minimum pay period and employers are required to pay according to the frequency. The pay could be given more often instead of paying less frequently. As a firm, you can have a payroll schedule according to your cash flow and operations. Just make sure that you stick to it.
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Incorrect identification of Employees vs. Contractors
This issue arises more with small businesses that have many independent contractors serving them temporarily. It is an actual legal classification to designate an individual either as an employee or contractor.
Businesses that misclassify the employees as a contractor might have to pay retroactive payroll taxes.
Failing to Pay Overtime
Not just the employees feel disappointed for not being recognized to work extra, it’s also illegal to not pay overtime to them. The employees who are deemed to be nonexempt must be paid 1.5x their hourly wages for the total hours worked if they exceed 40 hours in a workweek.
Not maintaining the Payroll Records
Every business owner must maintain a payroll record accurately. This record includes W2-Forms, pay stubs, timesheets, etc that are required for audit. Though the requirements may vary according to the states, it is recommended to keep records for at least 4 years.
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Waving the Pay for Work-Injury Period
If an employee gets injured while at work, they are eligible to be paid for the time that they have spent waiting to be treated for the same. This has been stated by FLSA too. Such instances should be considered similar to normal working hours.
Getting outdated with Payroll Rules, Law & Regulations
There may be changes in the existing rules and regulations of Payroll. Thus, any type of business or individuals concerned with payroll must keep themselves updated with the same. Else, their valuable time might be spent amending the mistakes. To stay assured, you may create a calendar to check for payroll regulations and law updates.
If you’ve been doing such mistakes, make sure to avoid it from now onwards.
Meanwhile, you may use one of the best check stub creators now!Tags: Create pay stubs, Free Pay Stub template, paycheck stubs, payroll for small business