How to Avoid Expensive Payroll Errors

Handling payroll processing means taking on a lot of risks, and sometimes that risk is not just for nothing. Issues with payroll software can lead to expensive mistakes or problems that take a while to resolve, and not all businesses can afford to make even the smallest error in their monthly paycheck system.

So how do you avoid the expensive consequences of a payroll system gone wrong, and what kind of factors are most important when you are trying to take preventative steps to avoid future issues from arising?


If you are not able to get payslips out to your employees fast enough, then you can end up losing their trust and potentially see some resignations. This is often forgivable for a new startup, but larger companies live and die by their ability to pay their employees on time.

You can get around this problem with scheduling tools, but even then, you need to guarantee that you can make paystubs quickly and consistently. Better payroll processing software (like the paystub creator at is often the answer, and more staff training with the financial tools you already have can help them produce paystubs on time.


A miscalculation in a payroll document can actively harm the employees working for your business. If you generate a pay stub that has errors in the numbers or calculations you need to follow, then it can become much harder to pay your employees the right amount of money. Even one small mistake could lead to all kinds of errors with the paystub results for every single monthly paycheck.

Using proper payroll software can make a huge difference here. A paystub generator can provide an automated way to make a pay stub online reliably, allowing you to generate a pay stub using your own data while ensuring that you will get consistent formatting and calculations across each paystub you create.

Also read: What is Mobile Payment Processing and How Does it Work?

Incorrect Classifications

It is easy to accidentally classify employees or contractors as the wrong thing, including marking employees as independent contractors. If you submit these paystubs, then you will usually end up suffering a direct penalty as a result, so it is important to clarify details like this before you finish with the stubs.

Getting any important details wrong can be a major issue. This means company names and reference numbers, employee names, or even the employee’s title. You want everything to be as accurate as possible, right down to the small details that might not seem like they would matter at first.

Poor Organisation

Not organizing your paystubs and payslips properly can lead to multiple fines, especially if it means that you do not have certain documents available when the government needs to see them. Of all the payroll issues, this can be one of the worst since it creates a mess of documents that might take hours to clear up.

Just switching to a cloud system is not enough – although that can help. You need to build a consistent and reliable organizational system for your payroll documents, one that can let you keep track of each individual payroll submission in case you need to refer back to your records for any particular reason.