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Small businesses better at spotting payroll mistakes

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
29 January 2020 1 minute readShare
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More than a third of Aussie businesses are not confident that they have identified and corrected all payslip errors, new research has revealed, with concern about employee underpayments at an all-time high.

A survey of more than 630 payroll managers by the Australian Payroll Association revealed that larger businesses are more likely to make payslip mistakes, with almost two-thirds of organisations with 5,000-plus employees admitting they hadn’t spotted and corrected all errors.

In contrast, 27 per cent of businesses with up to 200 employees found themselves in a similar situation.

In addition, 30 per cent of organisations admitted to accidentally paying a terminated employee.

However, the proportion is a low 10 per cent of businesses with under 200 employees and 25 per cent of those with 200–500 employees, compared with 51 per cent of organisations with 500–5,000 employees and 71 per cent of those with 10,000-plus employees.

Underpayments more common than overpayments

According to the findings, 28 per cent of organisations believe employee underpayments occur more frequently in their organisation than overpayments, the Australian Payroll Association revealed.

It also indicated that overpayments occur more frequently within big organisations. Just 18 per cent of businesses with fewer than 500 employees make overpayments more often than underpayments — this compares with 35 per cent of organisations with more than 1,000 employees.

“With the Fair Work Ombudsman frequently cracking down on companies that miss errors in employee payslips, even when these errors are oversights and not deliberate, it’s crucial that organisations do more to rectify these issues,” said Australian Payroll Association CEO Tracy Angwin.

“One of the biggest ways that organisations can mitigate payroll errors is by ensuring that their staff receive adequate education and training. This will help to minimise the likelihood of other payroll mistakes occurring, such as accidentally paying a terminated employee.”

Ms Angwin opined that having strong governance and controls also helps organisations de-risk the payroll function by ensuring they have well-documented processes to help staff understand the current legislation.

Small businesses better at spotting payroll mistakes
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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