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3 Common Payroll Errors Made by SMEs

payroll errors


Payroll errors are one of the most serious mistakes that can be made by the HR department. From angering and frustrating employees to exposing the company to legal action, payroll processing is one of the most important processes in an organization.


Like anyone else, employees expect to be compensated fairly and adequately for the work put in. Thus it is the duty of the employer to ensure that nothing goes wrong. As can be seen here, payroll errors are in fact much more common than one would think.


Most of the time, mistakes made during payroll processing can be attributed to a lack of training as well as inexperience. Given the importance of accurate payroll processing, it is vital that organizations take steps to ensure that their employees are paid fairly and on time.


Here are 3 common payroll errors/mistakes made by organizations during payroll processing.


Human Error

From being overworked to simple oversight, human error is one of the main contributing factors to payroll error. In today’s fast-moving world, employees come and go with just a snap. Hence an overworked payroll executive or manager may miss out on several crucial details.


Often many smaller organizations prefer not to invest in an automated Payroll System and instead choose to process their payroll manually. As a result, the chances of payroll errors/mistakes being made rise significantly.


This can range from calculating inaccurate CPF contributions to failing to key in an employee’s logged overtime. Consequently, an organization’s employees may end up being underpaid for their contributions to the company.


Besides angering employees and causing inefficiency, other mistakes can even lead to the company being hit with penalties and fines from the government.


Rather than leaving it up to chance, automating your company’s payroll with our integrated cloud payroll ensures seamless workflows with the rest of the HR functions and reduces the risk of mistakes.


In the long term, this cuts down on re-work and speeds up payroll processing.


Recording incorrect data

Inaccurate or wrongly input data can cause a variety of problems for the organization. A majority of the time, organizations fail to take data integrity seriously. Data from employees such as immigration status and bank account details are carelessly filed away and only retrieved during payroll processing.

This antiquated approach not only slows down the flow of work but also can lead to serious breaches in data. For example, an intern at company A is assigned to personnel filing duties. However, said intern was distracted by his phone and as a result wrongly filed the bank account details of several employees.


Come payday, the HR department is inundated with complaints from angry employees who have not received their salaries. Further compounding the problem is that tomorrow is a Saturday which means that the payroll department has to work over the weekend to ensure that salaries are paid on Monday.


The above situation could have easily been rectified with an integrated cloud payroll system like that from IQ Dynamics. By integrating both payroll and HR functions, we minimize the risk of incorrect data being input.


Failing to comply with government regulations

Employers have to fulfill a variety of responsibilities when preparing their employee’s payroll. These can range from mandatory CPF contributions to making the required deductions for tax purposes.


Oftentimes, payroll processing is left in the hands of an executive or manager with insufficient training and knowledge. This can lead to payroll errors such as making payments for the wrong taxes or failing to make the proper deductions. Consequently, this exposes the organization to fines and summonses from government bodies.


Fortunately, such payroll errors are completely avoidable with the right knowledge and software. At IQDynamics, our integrated payroll system is updated on a yearly basis to ensure compliance with the latest government statutory requirements.


Furthermore, with our system’s self-service portal, employees can retrieve and print out their own payslips without having to approach the HR department. This ensures that employees have easy access to their payslips and also reduces the workload on the HR department. Finally, employees will also be able to submit their own e-IRAS forms via our web portal for added convenience.


Payroll processing can be tricky at the best of times. With inadequate knowledge and faulty software, this problem is further compounded tenfold. This is why we at IQ Dynamics have developed an integrated HR system that includes a payroll system to ensure that your organization remains in line with government requirements while also reducing the workload on your team.


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