According to a recent study by Price Waterhouse Cooper, FSTE 100 companies could be paying out up to £30 million a year on payroll errors.
Late report notices and employee taxes seem to be a large contributor.
This is stems from business increases their international footprint, with employees working abroad they therefore fall under each countries tax systems. Companies are struggling to deal with each countries legislation which can sometimes be challenging and with employees working different patterns across different countries. With the introduction of Real Time Information (RTI) reporting by HMRC, companies need to submit details of employees working in the UK and foreign workers.
Chris Watt, Payright business leader at PwC, added:
“The landscape has changed; the rapid rise of social media, smart devices, big data and cloud computing has opened up avenues for improvement. At the same time, employees are becoming more savvy through demographic change, increased expectations and empowerment.”
In 2013, we saw a payroll slip up cost Lincolnshire Police £1 million in one-off payment to fix underpayments to its PCSO’s after changes to their shift patterns.
Outsourcing can relive the administrative burden and prospect of fines allowing companies to concentrate of their own revenue streams.