Top 7 Payroll Mistakes Businesses Make—and How to Avoid Them

Payroll might seem like a simple task—just make sure your employees get paid on time, right? But for many businesses, especially smaller ones without dedicated HR teams, payroll can be a major source of stress. One of the most common mistakes is misclassifying workers—mixing up employees with independent contractors can lead to serious tax and legal issues. Another big one is missing tax deadlines, which can result in costly penalties. Then there's incorrect tax withholding—if you're not calculating the right amounts for federal, state, or local taxes, both you and your employees could face problems later. Many businesses also struggle with properly tracking overtime, which can easily lead to underpayment claims and compliance issues.