Common Payroll Mistakes
Payroll might seem simple—until it goes wrong. Here's how to avoid penalties, unhappy employees, and extra work.
Common Payroll Mistakes and How to Avoid Them
Payroll errors can cost your business both time and money. From SARS penalties to employee dissatisfaction, even small mistakes can have big consequences. Here’s how to stay compliant and stress-free.
Mistake 1: Incorrect Tax Withholdings
What Goes Wrong:
Incorrect tax calculations can result in either overpayment or underpayment, both of which can trigger penalties from SARS (South African Revenue Service).
Quick Fix:
Make sure your payroll system or accounting software is updated with the latest SARS tax tables to ensure accurate withholdings.
Mistake 2: Missed SARS Deadlines
What Goes Wrong:
Missing key payroll tax deadlines — such as UIF, PAYE, or SDL submissions — can lead to unnecessary penalties and cash flow disruptions.
Quick Fix:
Set automated reminders or use software that alerts you ahead of SARS submission deadlines to stay compliant and keep your team happy.
Mistake 3: Incorrect Payroll Deductions
What Goes Wrong:
Incorrect UIF, PAYE, or pension deductions can frustrate employees and cause compliance issues during audits.
Quick Fix:
Review deduction percentages regularly and cross-check them with the latest SARS and Department of Labour guidelines to avoid under- or over-deductions.
Mistake 4: Poor Payroll Recordkeeping
What Goes Wrong:
Disorganized or incomplete payroll records can result in non-compliance during audits, delayed SARS submissions, and even financial penalties.
Quick Fix:
Keep accurate, organized digital records of all payroll transactions to ensure full traceability and legal compliance.
