Brought to you by
BrightPay logo

The payroll solution that provides all you need for Auto Enrolment.

Save content
Have you found this content useful? Use the button above to save it to your profile.

Payroll errors at 3 major companies leave thousands out of pocket

22nd Jul 2022
Brought to you by
BrightPay logo

The payroll solution that provides all you need for Auto Enrolment.

Save content
Have you found this content useful? Use the button above to save it to your profile.

On Tuesday morning, thousands of Ernest Young staff in the US awoke to find that the wages they were paid the week before, had disappeared from their bank accounts. In the UK, high street retailer Next apologised to staff after an error made in deducting pension contributions meant some employees had been underpaid for months. Employees at the supermarket giant Asda have been left up to £500 out of pocket due to an “issue” with their payroll system. It was admitted that the external payroll firm which processes the wages of Asda staff had made almost 11,000 errors in recent months, affecting 5,500 employees.  

These cases show the real-life impact that payroll errors can have. It was reported that due to these underpayments, employees were forced to turn to food banks, skip meals and take out loans just to cover their basic needs. As the cost-of-living rises, payroll errors can impact employees more than ever before. While these stories hit headlines due to the high number of people affected, employees being paid late and being paid the wrong amounts is something that happens every day across the UK. Most of the time, the mistakes that cause these issues could have easily been avoided. These stories will come as a stern reminder to payroll processors of just how important it is that clients’ employees are paid correctly and on time. 

While the impact these mistakes have on individuals and families is the most detrimental, it isn’t the only thing that payroll processors have to worry about. These mistakes can have further consequences, including: 

  • Loss of trust between you and your clients 

  • Reputational damage 

  • Loss of clients 

  • Damage to clients’ relationships with their employees 

  • Time wasted rectifying errors 

So, what can you do to decrease the chance of payroll errors happening? Or, when they do happen, how can you ensure that the problem is resolved before it turns into a bigger issue? The answer could be in the payroll software you choose. 

Ways your payroll software can help you avoid payroll mistake

1. Make the client responsible for ensuring payroll information is correct 

By introducing your clients to an online employer payroll platform, you can allow them to have more of an input in their payroll. BrightPay Connect, BrightPay’s cloud extension, allows you to send a summary of the payroll information over to your clients, through a secure online dashboard, each pay period. The client can then make changes to the payroll information themselves and when they do so, you will be notified on your own bureau dashboard. You can also send clients a “Payroll Approval Request” which allows the client to give the final approval of the payroll information, before you finalise the payroll. Any payroll data added by the client will automatically flow back to the payroll software, once you have signed off on it. 


2. Get notified of tax code changes through your payroll software  

When an employee’s tax code changes, HMRC sends the employer an email. However, if you are not informed of this or forget to update your payroll records with the new tax code, this could lead to the employee being paid incorrectly. As BrightPay Payroll Software is integrated with HMRC, you will be notified within the software when there are new coding notices to be applied to employees on the payroll. From the main dashboard, you can then apply the new tax codes. 


3. Pay employees directly through the payroll software 

Nowadays, most employees will be paid by credit transfer. While this is by far the most convenient option, it can be prone to mistakes due to human error, as it’s easy to accidently type in the wrong amount when creating a bank file. If you use BrightPay’s integration with payment platform Modulr, you no longer need to worry about this happening. Simply choose to pay employees through Modulr within the payroll software, and all the employees’ pay information is automatically transferred to Modulr, where you can then process payments. 


4. Allow for last minute changes to employees’ pay with Faster Payments  

As the Modulr system uses Faster Payments, it means that payments can be processed 24/7, even on weekends or bank holidays. Using other systems to pay employees by credit transfer can mean that you have to wait three days before the money lands in employees’ bank accounts. By paying employees through BrightPay’s integration with Modulr, employees can be paid within 90 seconds of you finalising the payments. This means that you can allow for any last-minute changes to the payroll and quickly rectify any mistakes. 


5. Automate auto-enrolment 

As we have seen, when mistakes are made with pension deductions, it can have an effect on employees’ take-home pay. According to recent research, 33% of payroll processors worry that staff will be paid incorrectly due to confusing payroll legislation. Pensions and auto enrolment can be a confusing part of the payroll process, and there are a lot of duties to remember. It’s important to ensure that only those who should be in a pension scheme are enrolled. This is why a payroll software that automates auto enrolment should be used to help you stay compliant. BrightPay constantly monitors employees’ eligibility in the background for you, with on-screen alerts to notify you when you have duties to perform. BrightPay will even generate enrolment letters for you to send to employees. 


6. Share payslips with clients and employees before pay day  

From the BrightPay Connect client dashboard, clients can view employees’ payslips as soon as they have been finalised. Through the employee app, employees will receive a push notification on their smartphone when their latest payslip becomes available. You may want to set it up so that employees will receive their payslips before the scheduled pay date. This means that if there are any mistakes on an employee's payslip, it gives the client and the employee a chance to spot it. This also gives you time to rectify the error before payments are made. BrightPay makes it easy for you, with the ability to simply re-open payslips and make your changes. If you are using our direct payments feature to pay employees, you can even make corrections to the payslip on payday and your clients’ employees will still get paid the correct amount, on time. 


To try BrightPay for yourself, why not download our 60-day free trial at no cost and with no obligations. Or, if you would like to see the software in action first, book a free online demo today.