Payroll Mistakes That Could Be Affecting Your Charity

10th June 2019

Charity Payroll

Paying your staff correctly and on time is very important and it can be a tremendous weight of responsibility on your shoulders. Getting it wrong can have some bad consequences for the charity. Not only will your employees lose trust in you, but it is also against the law to not comply with payroll legislation. Failure to comply can result in some hefty fines. We often see that charities don’t have a dedicated payroll expert; however, it is vital that the person who oversees the payroll is trustworthy and able to take on the workload.


Common charity payroll mistakes

  • Missing deadlines

Deadlines are another complexity of payroll. There is much more to consider than traditional tax season. Often in charities employees are stretched thin so it is harder to stay on top of everything and in payroll you need to stick to certain deadlines in order to stay compliant. Legislation changes and new laws are introduced frequently, so you need to ensure you have someone who can constantly keep up to date with it all. Failing to keep to these deadlines can result in fines.

  • Data Inaccuracies

One of the most common payroll mistakes is inaccurate data, usually down to human error and not updating the data frequently. Again, with charities, we see that there isn’t usually a knowledgeable dedicated payroll manager that has enough time to ensure these mistakes aren’t being made. Outsourcing your payroll to a company that use these systems or uses payroll software is a great way to reduce data inaccuracies

  • Fraud

The National Fraud Intelligence Bureau found that 50% of organisations had been affected by a fraud attack. The commission said that charities are just as vulnerable to insider threats as others and found that these fraud crimes were made possible because of poor challenge and oversight, no internal controls or, where controls did exist, not applying them consistently, and too much trust and responsibility placed in one person.

  • GDPR

Charities have a lot of sensitive employee data and often don’t have someone specifically dedicated to checking that they are keeping up to date with GDPR regulations. Outsourcing your payroll to a company who has security accreditations such as ISO 27001 will help you comply with legislation, protect valuable employee data and prevent any fines.

  • Volunteers might actually be employees

The government has stated that your volunteers could actually be classed as workers if they get any payment, reward or benefit in any kind. This can include getting any expenses paid or the promise of a contract or paid work in the future. It is important that charities are aware of this to prevent breaking any laws or legislation.


Payroll Management Options

If you don’t want to manage your payroll in house or you need some help, there are a number of payroll management options that can help you out.


There is a lot of payroll software available that can be utilised by charities and customised to meet your needs. However, you still need to have a good understanding of payroll legislation in order to use the software efficiently, so for charities, who don’t have a dedicated payroll expert, software might not be the best way to manage your payroll.

Many charities find it challenging to keep on top of the frequent and complicated changes to tax codes and legislation. A specialist payroll outsourcing company will have the experience and processes in place to avoid these errors, which is why many businesses choose to outsource. The administrative functions of payroll can take up valuable hours that could be used to focus on core business drivers. You can choose to get fully managed or part managed outsourced payroll depending on how much control you want over the process.

money transfer

The Ultimate Guide To Payroll For Charities

Paying your staff correctly and on time is very important and this can be a tremendous weight of responsibility on your shoulders. Getting it wrong can have some bad consequences for the charity.

Download Resource