Global Payroll Advisory

Payroll: The Importance of Accuracy and Efficiency

Published on 13 Mar 2023

The importance of payroll accuracy and efficiency cannot be overlooked

Let’s be honest – no one really thinks about payroll. That is, until a mistake happens. Maybe an employee’s salary this month didn’t reflect all the overtime they tirelessly put in, or the worst-case scenario of late payment on salaries occurs company-wide. In these situations, you would have some unhappy employees to answer to. All is well and good if you are able to rectify it quickly, but it is then key to not let it happen again.


That’s because when it comes to salaries, a majority of people will have a very low tolerance for instability. A survey has shown that over 50% of people will start looking for a new job after only two payroll errors. Not only will the issue impact your employee’s confidence in your organisation, but it could impact your reputation as an employer overall.


This is not even taking into account the potential fines and penalties regulators can impose on you for non-compliance. In the US, paying your employer taxes a day late will result in a 2% penalty, and that increases over time. Many jurisdictions will have similar fines in place. Besides fines, employees can take you to labour court and the damages can be rather significant.


Types of Payroll Errors, and How to Deal With Them


Payroll errors can plague all companies, from the bootstrapping start-up to even the most sophisticated of MNCs. We pulled together some common payroll errors and put forward some suggestions on how to handle them below:

Payroll Error



Classification of employees

Examples include misclassifying full-time employees as part-time or inputting the wrong pay rate. This can create a domino effect that impacts all other areas of payroll including withholding and tax errors

  • - Always double-check any new employees’ details

  • - Provide Employee Self-Service and have employees double-check their own details at on-boarding

Salary amount

Besides misclassification, incorrect overtime records, calculations or added salary complexity such as commissions can contribute to wrong salary amounts being paid out

  • - Automating HR processes around payroll to reduce human error – clock in systems to move away from relying on timesheets, for example

  • - Integrate HR and Accounting systems to lower incidences of error

Salary deadline

Payroll has to run on very strict timelines, and ensuring adherence to those deadlines is crucial to ensure salaries are always paid on time. Employees, and the government, can be very unforgiving if salaries are paid out late.

  • - Pick a pay schedule that suits your organisation’s capacity, allowing for error checking, approvals and other steps



Problems with taxes can include misfiling or unintended missed deadlines, but missed tax payments will result in penalties and fines

  • - Having a payroll software that is compliant to local regulations and updated automatically will help ensure that not only are your tax filings correct, but also automate the process to ensure you do not miss a deadline

Record keeping

HR is legally required to keep multiple years of records that are not only accurate, but complete. Not keeping records is in itself a fineable offence.

  • - Enforce a solid record keeping process

  • - Digitalise your records

Keeping Your Payroll Accurate and Efficient

We can't step away from the importance of technology in ensuring that payroll can remain accurate and efficient. Not only does automation play a role in minimising errors, but system integration, especially with accounting software, will help to reduce mistakes at points of "handshakes" between systems. Businesses are not the only players looking to technology to support payroll processes, but governments the world over are also embracing technology for their taxation systems. Countries like Japan, Mexico and Ireland have all implemented straight-through processes in recent years.

The right payroll technology partner is important. OS HRS is an award-winning payroll solution provider, with dedicated compliance expertise, ready to support your multi-country payroll across Asia Pacific and beyond. Get in touch with us today to find out how we can support your specific payroll needs today.

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