Payroll Horror Stories

Mistakes, hidden charges and things that go bump in the night!

With Halloween approaching our minds have turned to the dark side of payroll. So this Halloween we wanted to share with you some of the payroll horror stories we have come across.

Charging a fee for coming out of contract

Sometimes organisations want to change provider. There will be contract and notice periods in place, which is standard practice. What isn’t standard practice, but we have come across with clients moving to us, is being charged a large and unexpected exit fee. 

Often this is veiled as being a charge for data extraction. Extraction of their data, often with no more complexity than downloading a CSV file. Not only is this a horror story, in our opinion its daylight robbery!

Errors and inaccuracies in payroll data

When you outsource your payroll, one of the main reasons is to have peace of mind that the payroll is accurate and compliant. You would expect that your employees are being paid with the correct tax codes and NI bands. Unfortunately, in our experience, this isn’t always the case and when we receive data from new clients from other providers and carry out our data cleansing process of parallel runs, we often find some huge mistakes.

Common errors include;
•    Wrong NI bands being used
•    Wrong tax codes 
•    In schools, incorrect allowance splits across different jobs 

Some of these errors may have been running unchecked for years. When we spot them we can correct and have managed to claim money back for employees from overpaid tax because of this (in some cases thousands of pounds).

Hidden extras

When is a payslip price not a payslip price? When it hides lots of ‘extras’ for tasks that you would expect to be included. 

This has been a problem that has been around for many years and doesn’t seem to be going away. Payroll providers quoting ludicrously low headline payslip prices but not being up-front about the extra charges on top of this payslips price. 

What makes this a horror story is that these are not what customers expect to be extras. Things like charging for processing starters and leavers, making BACS payments issuing P45s to employees and carrying out year-end submissions are what people expect to be included within the payslip price but are not included by some payroll providers. 

Make sure when comparing quotes you check out what is and what isn’t included and factor that into the final price.

Not having named contacts

We come across this problem time and time again, with the traditional payroll bureau model, it is a massive frustration to many organisations that they have no consistency of who is processing their payroll. This makes it difficult to get continuity and painful if you want to talk to a human who knows about your payroll.

It is no surprise then that it is one of the most common questions and requests we are asked by prospective clients "Will I have a named contact?" Fortunately, we can answer "yes". All our clients are given a named contact who works in a team that is responsible for processing your payroll. This gives them the chance to really get to know your payrolls and organisation and to build rapport with your team.

We aim to act as an extension to your payroll department and we encourage clients to have direct contact with their Dataplan payroll professional.

Local Authorities ceasing payroll provision

This payroll horror story is one exclusive to schools. Many schools still chose to use their Local Authority to manage their payroll, even if they have moved to Academy status. Often this is due to a legacy of the LA always having managed the payroll, or that they also provide services such as HR so it makes sense to have it all in one place.

Recently we have come across a number of Local Authorities who have notified schools that they are no longer going to provide this payroll service. It could be for specific schools, i.e. those that don't use other LA services or maybe a blanket decision to stop offering this service. We have even come across an instance where the payroll contract was put out to bid and was being sold to a payroll provider without the schools being informed.

Often the first they are informed is when they are notified with a few months’ notice that they need to find an alternative provider. This causes panic and stress, especially for schools that may not have any in-house expertise or time spare to find a new education payroll provider.

Hopefully, you haven't experienced any of these payroll horror stories, but if you have then we'd love to have a chat and discuss how Dataplan takes a very different approach!