It’s not very often that payroll makes headline news – and certainly not in the entertainment section! But one story cropped up in January 2024 that highlighted how even the slightest error can have major consequences.
Tom Hollander is a well-known British actor, and a former winner of a BAFTA for his part in the BBC drama The Night Manager. In a conversation on the American talk show Late Night with Seth Meyers, he revealed that he had unexpectedly received a seven-figure payment in his bank account. Once he saw that he’d received an email with a payslip labeled “Box office bonus for The Avengers”, it became clear that the money should have instead been paid to Tom Holland, star of several Marvel superhero films in recent years.
“It was an astonishing amount of money,” Hollander said. “It was not his salary. It was his first box office bonus. Not the whole box office bonus, the first one. And it was more money than I’d ever [seen]. We were with the same agents briefly and people in the accounts department got confused.”
It’s a very high-profile example of the consequences of a mistake as seemingly small and innocent as confusing two people, in the same line of work, who have very similar names. But it’s served as a real conversation starter in the payroll world: what are the most common payroll errors, and what can you do to avoid them?
Firstly, it’s vital to consider why these errors should be cut out at every opportunity. Obviously, from a business point of view, mistakes in how, what, and when people are paid can lead to non-compliance issues, investigations, and large penalties. But payroll errors affect the workforce at a much deeper level, especially in the current climate where personal finances are often stretched.
In the UK, for example, a CIPD survey revealed that more than two-thirds of businesses thought employee financial wellbeing had suffered in recent years – although less than half had established any sort of financial wellbeing policy. Many employees already feel stressed about their finances, and unnecessary payroll errors can only add to that stress if it means they suddenly can’t cover their housing costs, utility bills, or other financial commitments.
All this can have a real impact on the mental and physical health of employees, and that can quickly come back to bite employers. Stressed, ill workers are less productive, less motivated, and are more likely to want to leave for pastures new. This can have a long-term effect on the bottom line, from deteriorating quality and quantity of work, to struggles retaining and attracting talented and skilled staff in a highly competitive job market.
In our experience, there are a few payroll errors that come up more than most, and while some of them may seem trivial, they can quickly cause big problems further down the line:
The good news is that a diligent approach, adding support in the right areas, and a dash of good old common sense can all help keep these errors to a minimum. But on a more practical level, we recommend these three strategies:
Getting all these right is important, but it can take a lot of time, consume a lot of payroll team resources, and generally put payroll practitioners under greater pressure – which can lead to more mistakes creeping in, not less. This is where technology like CloudPay’s global payroll platform comes in, automating and integrating a huge range of processes for maximum efficiency, accuracy, and timeliness. Find out more about how it works here.