If you have any number of employees working in a business, you’re going to be dealing with payroll and paystubs. Paystub errors and payroll problems can add up in terms of costs and any possible legal risk.
The good news is that many of the biggest problems are simple to resolve, but if you don’t know what they are, they can be difficult to avoid. Incorrect payroll and paystubs can cause big problems for employees and those who rely on that money to live.
Prevent Legal Risk With Paystubs
Paystubs themselves are needed to prove income for future things like renting an apartment. Of course, if you lose your paystubs or don’t know how to make one for your company, there are services available to help you generate pay stubs with no sweat.
Avoid a Lawsuit
If an employee notices an issue on their paystub, be sure you find the issue and deal with it right away. Don’t wait. Employees need to be checking their hours, rates of pay, taxes paid, 401K payments, and any additional aspects like sick leave and time off.
Incorrect payment can be a simple mistake to clear up, or a larger repeating issue that leads to soured work relationships and possibly even a lawsuit. Being upfront with employees and providing clear paystubs and maintaining an organized payroll is the best policy.
An accounting firm or a payroll outsourcing company can help with miscalculations, but if you’re a smaller business you may not have the ability to use these. Be sure to catch problems early, and double-check work involving paystubs so you don’t need to pay back or pay up.
If you aren’t paying the right amount to employees or calculating time worked correctly for the paystubs, you could end up paying out later. If you run the payroll, you have to make sure that all of the details are correct, including on things like submitting employment taxes and the classification of employees.
If you submit taxes later than their due date you could end up paying fines and fees to the IRS that should be avoidable. Make sure you know when everything is due, including paystubs to employees so you are working within the law and don’t end up owing money later.
Pay Tax or Be Taxed
If you’re handling payroll or need paystubs as an employee, you will have to deal with taxes. Making sure you are paying employment tax, or providing your W2 form when it’s needed for taxes helps you avoid later fees and expenses.
Keep Your Cash
Often the biggest legal risk with paystub errors revolves around money. You can avoid the unnecessary run-in with the IRS or an irate employee by making sure your payroll system and paystubs are correct and well done.
Whether you’re an employee or an employer, your hard-earned money should remain with you. Keep your records, keep your hours, and you shouldn’t have any problems in the future. And if you found this article helpful, check us out for more good financial advice.