If you manage your company’s payroll in-house, it is a good idea to ensure you can access reliable temporary payroll cover at short notice when required. This is not just because employers have statutory obligations to pay their employees correctly and on time but also because payroll problems can affect employee trust, impact productivity and even damage your company’s reputation. When things go wrong it is important to have a backup plan that you know you can rely on.  

What causes payroll disruption? 

Problems with IT are a common cause of payroll disruption, however other issues can also cause create difficulty. These include: 

• Periods of special or extended leave e.g. maternity leave, illness or bereavement 
• Temporary lay-off of key staff  e.g. during Covid-19 lockdown restrictions 
• Payroll administrator retiring, resigning or assigned to another division  
• Disruption due to disaster e.g. flooding or fire 
• Ransomware / cyber attack 

Impact on employees  

Payroll problems don’t just impact employers. Pay is very important part of the employer/employee relationship so when problems arise, it’s important to resolve them promptly. Delayed or missed payments, incorrect deductions or being on the wrong tax band can cause immediate financial problems for employees. Mortgage payments may be missed, or an individual may have insufficient funds to pay for necessary services like childcare. Problems like this are time-consuming and cause undue stress for employees. They affect productivity and morale and can ultimately damage your employees’ trust in your business. 

Impact on the business 

Anything that damages employees’ morale is concerning both for the internal impact on the business and because it poses a potential reputation risk. Employees may complain on websites like Glassdoor which can have an adverse impact on your future ability to recruit. 

Another pressing worry is that employers have statutory and tax responsibilities which means payroll problems need to addressed promptly to avoid potential penalties and fines. Two particular concerns are: 

• Failure to pay employees or issue payslips is a breach of the Payment of Wages Act which can lead to a fixed payment notice.  
• Since the introduction of PAYE Modernisation in 2019, employers must report payroll information to Revenue each time they pay their employees indicating the amount of pay, payment date, and tax deducted. Employers who breach the PAYE Regulations can incur a €4,000 penalty per offence under section 987 of the Taxes Consolidation Act 1997.  

Costs can escalate rapidly when payroll problems are ignored, particularly if pay is owed to your employees. Several large companies made headlines in recent years for having to make reimbursements and pay fines due to underpaying their workers for a period of time. 

How can temporary payroll cover help? 

While it might be tempting to ask another staff member to fill in for a missing payroll operator, this can be an expensive mistake if skills are not up to date and lead to payroll errors. In addition, you may not be comfortable sharing sensitive employee remuneration rates with other members of staff. A safer and better option is to obtain temporary payroll cover from an experienced payroll service provider.  

The advantage of temporary payroll cover is that it is available at short notice and gives you access to the necessary skills to operate your payroll correctly. However, when choosing your service provider, it is important to ensure that they offer a quality service and have sufficient scale to respond promptly to your requirements so that your payroll can continue to run smoothly. 

Alternatives to temporary payroll cover 

Many companies find that keeping payroll staff, systems and processes up to date with constantly changing tax and legislative requirements is time consuming, expensive and stressful. This, together with advances in cloud technology, is stimulating demand for outsourced payroll processing and management services. At HLB Ireland, we see this reflected in increased demand for our dedicated, partner-led outsourcing and payroll division. Our highly experienced team undergo regular training so that they are fully up-to-date with changes in payroll legislation and regulations. For our clients, the advantages of outsourcing include time savings and reduced costs as they no longer need to employ and train in-house payroll staff.  

If you are considering outsourcing, it is important to check the service provider’s compliance with relevant legal, tax and data protection requirements. You should also ensure that they have sufficient scale to deliver a consistent, reliable payroll service. 

For further information on these services , check out our outsourcing services page or contact Adrian Barrett on 01-2915265 or at [email protected]