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5 Mistakes To Avoid In Small Business Payroll

5 Typical Mistakes To Avoid In Small Business Payroll


Like anything else in business, your payroll is just one of those things you want to get correct from the start itself. This helps avoid wasting time later trying to find and unravel that one minor issue which was skipped over or miscalculated. Managing your own payroll, complete with a software, will give you more confidence in handling your business.

Here are some common mistakes you should try to avoid from the start itself.




Don’t Skip It


Sort out your payroll from the very first day itself. Try not to get into the habit of paying in cash as this can complicate matters, especially with your payroll calculations, taxes, and accounting.


Use our partner's automated system to do your PAYE calculations, sort out payslips, set up employee and bank details for transfer.




Don’t Fudge It


Managing payroll system is actually quite simple once you get the hang of it, even after the first try itself. Plus, if your employees are all salaried, then there are very little changes you might need to include such as leaves, bonuses, etc.

Ensure that leaves taken are not missed, even if it's from months ago. Set aside a few minutes for revising these minor details. This shouldn't even take a minute for each employee if the records are proper.



Don’t Wing It


Going by your hunch is a bad idea when it comes to NZ payroll rules. A good understanding of the payroll system and the underlying calculations involved in the process is a great way to learn. But, if you haven't got time for that, consider hiring a bookkeeper or an accountant to help you out with the set-up. It is totally worth it and we can definitely recommend you one of ours.



Don’t Forget It


Small businesses often have a changing work pattern for their employees. As the business grows, part-time employees may add extra days, or change from a casual relationship to full time.


It’s crucial to record these changes as and when they happen in your payroll software. If not, leave accruals are likely to be wrong, and average rate calculations could get skewed.


Note that some payroll systems don’t record leave accruals on a pay-by-pay basis so some manual adjustments may be required to accommodate changes.



Don’t Under Do It


It’s a government requirement that you keep a detailed employment record for up to 7 years. Every time an employee takes leave, ensure that the days taken are tracked. For employees with irregular hours, ensure you capture the times worked on a day-to-day basis.


Any time you make changes to your employee’s set up/details, ensure you also add a note to document why the change was made. This option is available with us on Your Payroll. You'll never know, these small details/notes can help you out of sticky situations.

About The Author ⬎

Your Payroll Team

Our team is fully accredited with the IRD and have years of experience in both payroll accounting practices and Inland Revenue taxes. They are also affiliated with a few of our business partners and can relate to clients and customers alike on all issues.


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