One in three pay slips could be wrong
IF you have ever checked your weekly income in your bank account, only to find you have been underpaid, you are not alone.
It might be cold comfort, but a whopping one in three payslips are wrong according to a survey – and underpayment is the biggest mistake.
Many organisations admit they miss errors in employee payslips – with underpayments more common than overpayments.
With concern about employee underpayments at an all-time high fueled by graphic media coverage of celebrity restaurants, new data reveals that more than a third or 36% of Australian organisations are not confident that they have identified and corrected all payslip errors.
In addition, 12% cent admit they have identified errors that they have not corrected.
The findings come from a survey of more than 630 payroll managers by the Australian Payroll Association – Australia’s leading network in payroll training, consulting and advisory.
The results also indicated that the greater the employee numbers, the more likely the organisation was to make payslip mistakes.
Almost two-thirds or 63% of organisations of 5000 or more employees believe they hadn’t spotted and corrected all payroll errors, compared with 27% of businesses with up to 200 employees.
And, in a funny aside, 30% of organisations admitted to accidentally paying a terminated employee. However, the proportion is a low 10% of businesses with under 200 employees and 25% of those with 200-500 employees.
Amazingly, 51% organisations with 500-5000 employees and 71% of those with 10,000-plus employees, paid people who no longer worked for them.
Getting back to underpayments v overpayments.
More than a quarter of organisations believe employee underpayments occur more frequently in their organisation than overpayments – but only by a little more.
In fact, 22% believe overpayments have occurred more frequently.
And a quarter of payroll managers also admitted that they do not do payroll reports for their CEO or CFO, excluding monthly PAYG.
The findings also indicated that overpayments occur more frequently within big organisations. Just 18% per cent of businesses with less than 500 employees make overpayments more often than underpayments – this compares with 35% of organisations with more than 1000 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,” Australian Payroll Association CEO Tracy Angwin said.
“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 occuring, such as accidentally paying a terminated employee.
“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, which changes regularly.
“The Australian Payroll Management, Australia’s first recognised payroll qualification, which can assist people working in payroll to get Association has developed the Certificate IV in Payroll Administration and the Diploma of Payroll properly trained and qualified.” Ms Angwin said.