Nearly two-thirds of workers in the United Kingdom have received incorrect pay at least one time, highlighting the extent to which payroll errors can impact employees.
According to the UK Payslip Anxiety Report, which was published by Access Paycircle, the vast majority of employees nationwide have experienced problems in receiving the right salary, with many experiencing financial concerns as a result.
Broken down, the report found that 64.98% of full-time employees have received incorrect pay at least once in their careers, while 56.76% of part-time employees have had the same experience.
Younger employees were also found to be more likely to receive incorrect pay, with more than 70% of those aged between 18 and 24 claiming to have been paid the wrong amount. Between the ages of 25 and 55, the number of workers who have experienced issues with the pay they receive ranged between 60% and 70%, before falling as low as 40% for workers older than 65.
There are many reasons why young workers are more susceptible to receiving incorrect pay at least once, with those entering the career ladder more prone to being placed on emergency tax deductions. Employers can also struggle to adhere to age-based minimum wage tiers due to poor compliance oversight.
Given that the report also found that more than 46% of those surveyed reported experiencing anxiety over their pay, with 16.62% claiming to have lost sleep over payroll issues, it’s clear that more employers need to prioritise accuracy when it comes to pay slips.
But what can UK employers do to manage their payrolls in a more efficient and accurate way? Technology could be a key tool for preventing costly and damaging errors in the future:
Automation Tools for Accuracy
Because the causes for the distribution of incorrect pay often stem from a lack of oversight or data entry errors, adopting automation tools as an assistive technology for HR teams can make a major difference for employers.
Automation tools can develop a unified database with a single Human Capital Management (HCM) platform where payroll systems are integrated with time-tracking, benefits, and other HR processes to eliminate the need for manual data reentry.
These tools are also excellent for providing accurate calculations based on pay factors like overtime, statutory payments like maternity or sick pay, and tax withholdings.
Because they’re cloud-based, automation technologies can also automatically adapt to compliance changes, applying new tax thresholds for each financial year in real-time to ensure that all National Minimum Wage increases are carried out as and when required.
Always Audit Changes
Nothing beats due diligence when it comes to payroll accuracy, and businesses should have protocols in place to check payment information prior to funds being transferred. This is particularly true during periods where promotions have taken place, changes in employee hours have occurred, or deadlines have led to more workers taking overtime.
Although automation tools can help with data entry and compliance, it’s worth taking steps to ensure that human oversight is in place to catch any potential errors before pay is distributed.
Given the messy legal landscape surrounding underpaying and overpaying staff, applying more time for HR departments to catch any problems sooner can have a positive impact if it means preventing a possible court case from taking place.
Preparing for Problems
Prevention is always better than cure, particularly when it comes to matters as sensitive as payroll. But when things go wrong, it pays to have a strong layer of protection in place that means you can quickly rectify the situation.
Upholding transparency and establishing clear avenues for communication are essential. This means that employees can quickly raise their concerns if they believe they’ve received incorrect pay. This may also help to prompt the faster reporting of overpayments for faster resolutions.
It’s also worth adding deduction clauses in the employment contracts of your workers. These allow for the lawful recovery of overpayments through future pay adjustments, meaning that employers can take decisive action in recuperating overpayments without having to take the case to court.
Overcoming Payslip Challenges
Sending the incorrect pay to employees can affect even the most slick business operations, but having the right systems in place and due diligence helps to ensure that any errors are isolated and easy to recover from.
While automation can be a major help in accurate payroll management, that all-important human touch can make all the difference in catching costly errors before they’re made. As always, making sure that transparency in communication is a great way of maintaining employee trust to ensure that overpayments are reported in a timely manner.
Incorrect pay may be a challenge for many UK employers, especially those who employ younger workers, but staying alert to the dangers of overpayments and underpayments can be made easier with the right blend of technology and human oversight.
