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Reality Check: The True Cost of Payroll Errors

Key Takeaways

  • A single payroll error costs a business $291 on average.

  • Given 20% of a company’s payrolls have errors, fixing them becomes a payroll employee’s full-time job for more than half a year.

  • The most common payroll errors involve time punches, expenses and more.

  • Employee-driven payroll gets ahead of errors by guiding employees to fix them before payday.

A recent Ernst & Young (EY) study of U.S. businesses using traditional payroll placed the average estimated cost of one error at $291. If this weren’t enough, EY found 20% of the average company’s payrolls over the course of a year contain errors.

An organization with an ineffective payroll process risks thousands of dollars in:

  • labor
  • voids and reversals
  • rushed paper checks
  • and other time-consuming corrections

It doesn’t matter if an employee is salaried or hourly; if they get paid, they can get paid incorrectly. And a single mistake triggers an avalanche of potential consequences.

There’s still more to this equation. On average, a full-time payroll employee sinks 29 weeks into correcting errors. That’s over half a year lost to preventable issues. Without the burden of a broken process, the same employee could invest time into:

  • formulating ideas to raise retention
  • enhancing engagement and development
  • researching competitive, unconventional benefits
  • and more

Luckily, rampant payroll errors don’t have to be the norm.

Related Webinar: The Real Cost of Payroll Errors and How to Avoid Them

How do businesses prevent payroll errors?

Mistakes are only problems when they’re not fixed early. With a traditional payroll process, corrections are always reactive. Getting ahead of these issues means putting payroll where it always belonged: in your people’s hands.

Beti® is Paycom’s employee-driven payroll experience. It automatically identifies errors, then guides employees to fix them before payday — right in the Paycom app.

If they need HR’s help, our Ask Here tool quickly puts employees into contact with the best person to assist.

To learn more, download the Reality Check: The True Cost of Payroll Errors infographic.

Key Takeaways

  • A single payroll error costs a business $291 on average.

  • Given 20% of a company’s payrolls have errors, fixing them becomes a payroll employee’s full-time job for more than half a year.

  • The most common payroll errors involve time punches, expenses and more.

  • Employee-driven payroll gets ahead of errors by guiding employees to fix them before payday.