4 Practices to Ditch Before Your Next Payroll Run


Payroll is an important part of human resources but is arduous as well. It involves retaining employee records, balancing salary budgets, tracking work hours, withholding taxes, distributing payments, and recordkeeping. Mistakes can be disastrous, which makes this aspect of business very stressful.

Implementing sound policies and procedures can make payroll run more smoothly. Putting in place these best practices will ensure your employees are paid on time and the correct amount.


It also will save you time and money down the road, not to mention reduce stress. Keep reading to find out more.

1. Be Transparent While Maintaining Confidentiality

One of the best practices in business, in general, is ensuring transparency. This is important for accountability as well as recordkeeping.

That applies to payroll practices specifically. Employees should be able to understand the payroll system so that all parties can confirm the correctness of payments.

Protecting employees’ personal information is also imperative. Workers should know that they are receiving all the information they need while private information--including how much they make--is kept confidential.

This is not only for new employees but for everyone. Keeping up regular communication about payroll, including impending changes, ensures everyone is on the same page and knows what to expect.

2. Go Completely Digital

Many companies--especially small businesses--still use paper checks. There are many different opinions on why this is. These include familiarity or the reluctance to switch to an electronic system.

There are many reasons this is problematic. One is that the federal reserve says that physical checks will be obsolete by 2026. There is good reason to believe that, when that time comes, banks will no longer accept them.

You also are required to keep all employee payment records for at least three years. Physical records waste a lot of paper and space. 

The good news is that there are great software alternatives to paper and pen. Such programs can reduce the amount of time and work to get payroll out. And it will allow you to search for information, rather than sifting through a cluttered filing cabinet.

3. Examine Classifications in Your Payroll Systems

There has been a recent uptick in employee classification lawsuits. These involve, for instance, situations where non-exempt employees are misclassified as exempt and not paid for overtime.

The pandemic exacerbated such oversights and errors. But putting systems in place to ensure that every employee is being paid what they are entitled to is not only good for morale, it may protect your business from litigation as well.

4. Stay On Top of Taxes

No one likes keeping up with tax documentation, least of all HR personnel.

But it is an important annual responsibility. Staying up to date on your tax obligations is another way to help payroll run smoothly. when tax season comes.

Getting 1099s out to independent contractors and W-2s to regular employees early can alleviate headaches down the road. It also will help with managing records and more time to ensure correct reporting. In general, not getting behind on tax information throughout the year is a great way to guarantee accuracy and full compliance by your company.

Learn More About How to Make Payroll Run Well

Now that you have some payroll tips to improve your policies and practices, you can ensure your payroll system is as efficient and accurate as possible. I hope this information will help your payroll run better. If so, be sure to check out some of my other posts on technology and business, as well as many other topics.