7 EXAMPLES OF PAYROLL ERRORS, AND WHY THEY'RE MORE COSTLY THAN YOU THINK

Running payroll is a delicate balance of accuracy, timing, compliance, and trust. Not merely a repetitive admin task. 

One tiny slip can snowball into overpayments, unhappy employees, HMRC charges, and hours of unnecessary extra work. 

Here are seven payroll mistakes small businesses make sometimes, with an explanation of why they cause issues and how working with the right systems (and the right team!) keeps everything running smoothly.

1. PAYING EMPLOYEES GROSS INSTEAD OF NET (OR VICE VERSA)

It sounds obvious, but it happens more than you’d think.

Employees earn a gross salary, but they actually receive the net amount after deductions for tax, National Insurance, pensions, and anything else that applies.

If the gross amount accidentally gets paid out as cash, the employee has been overpaid, which usually leads to a very awkward conversation asking them to pay it back. And if they’ve already left the business? Your chances of recouping that money drop dramatically.

Sadler Advisory helps with this by running payroll through BrightPay with Apron Payments, payroll data flows directly into the payment run — meaning employees are paid the right amount automatically.

2. LOSING TRACK OF WAGE ADVANCES

Wage advances are perfectly fine… as long as they’re recorded properly.

If they’re not tracked and deducted from the next payroll, things get messy fast: incorrect payments, confused employees, and cashflow headaches for the business. Over time this can add up to real financial loss.

At our practice, we put clear processes in place so every advance is logged and reconciled, so no more guesswork.

3. MISSING DEADLINES FOR HMRC PAYMENTS

PAYE and National Insurance bills must be paid to HMRC on time. Miss the deadline and interest starts piling up.

For most businesses, payments are due by the 22nd of the month following payroll. It’s easy to forget… and HMRC never does.

Our advice would be to avoid all of this by setting up HMRC direct debits and automating submissions, which is what we do for our clients. One simple setup saves a lot of stress.

4. MISSING TIMESHEETS FOR HOURLY-PAID EMPLOYEES

If a timesheet doesn’t reach payroll in time, the pay for that employee won't be correct, or could be missed entirely.

Cue frustration, extra admin, and last-minute corrections. Our approach is to help businesses streamline their timesheet process so information arrives on time, every time.

5. PAY RISES NOT PASSED TO PAYROLL

A manager agrees to a raise… but forgets to tell payroll. It’s one of the most common issues we see.

The employee is underpaid, has to raise it with HR or finance, and payroll then has to go back and fix it — turning a positive moment into an unnecessary headache.

You can prevent this with a clear approval workflow and payroll managed centrally, pay changes never fall through the cracks

6. NOT CLAIMING THE EMPLOYMENT ALLOWANCE

For 2025/26, eligible employers can claim £10,500 via the Employment Allowance, a seriously valuable saving.

We recently reviewed a client’s payroll (previously handled elsewhere) and discovered they’d missed the claim for two years.

• They received the full £10,500 for 2025/26

• PLUS an extra £5,000 from 2024/25 after we backdated the claim

  
  

Claims can be backdated up to four years, so it’s well worth checking. Our payroll reviews often uncover missed savings like this, money that should be back in your business.

7. NOT PAYING ACCRUED ANNUAL LEAVE WHEN EMPLOYEES LEAVE

Hourly-paid and zero-hours employees accrue annual leave just like full-time employees. Many employers aren’t aware of this.

When an employee leaves, any unused, accrued holiday must be calculated and paid out. Failing to do this can result in disputes or claims, as well as compliance issues.

THE LOW-STRESS WAY TO KEEPING YOUR PAYROLL ERROR FREE

Payroll mistakes can be costly, stressful, and surprisingly common, but they’re also completely avoidable with the effective software, people and organisation.

At Sadler Advisory, we help businesses eliminate payroll errors, stay compliant, and cut out unnecessary admin.

And with tools like BrightPay + Apron Payments, we can even automate the payment process so employees are paid accurately every single time.

If you’d like a payroll review or want help setting up a smoother, safer payroll process, we’re always here to support you.