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Common Payroll Management Mistakes and How to Avoid Them

Payroll management is a key task for any business, but also one of the most complex. Mistakes in managing it can lead to purposes, legal issues, and employee discontent. Below, we present the most common mistakes and how to avoid them.

1. Errors in Payroll Calculation

An incorrect calculation may be due to factors such as:

  • Errors in recording hours worked.

  • Incorrect application of deductions and perceptions.

  • Failure to update ISR tables.

How to avoid it?

Use up-to-date payroll software.

Regularly verify employee information.
Train payroll staff.

2. Failure to Comply with Tax Obligations

Companies must comply with various tax obligations, such as:

  • Correct withholding and payment of ISR .

  • Contributions to IMSS, INFONAVIT and SAR .

  • Payment of Payroll Tax (ISN) according to the state.

 

How to avoid it?

  • Stay up-to-date with tax regulations.
  • Automate tax calculations.
  • Hire accounting and payroll experts.

3. Failure to Submit CFDI Payroll Receipts

Since 2017, it has been mandatory to submit payroll receipts in CFDI (Digital Tax Receipt via the Internet) format. Failure to do so can result in tax penalties.

How to avoid it?

  • Issue and send payroll receipts in a timely manner.
  • Ensure they meet SAT requirements.
  • Keep records of issued receipts.

4. Errors in the Classification of Workers

Confusing employees with service providers can lead to legal problems and sanctions from the Ministry of Labor and Social Welfare (STPS) .

How to avoid it?

  • Correctly define the type of employment relationship.
  • Comply with contractual obligations based on the type of employee.
  • Consult with legal advisors if you have any questions.

5. Late or Incorrect Payments

Late payments generate dissatisfaction and affect employee morale, in addition to generating fines.

How to avoid it?

  • Establish a fixed payment schedule.
  • Use automated transfer tools.
  • Regularly review business account balances.

6. Failure to Comply with the New Subcontracting Reform

The outsourcing reform in Mexico eliminated the subcontracting of personnel except in specific cases.

How to avoid it?

  • Make sure your company complies with the new regulations.
  • Avoid payment schemes that could be considered illegal. Consult with EOR and outsourcing
  • experts .

7. Not Having an Internal Audit Process

Failure to audit payroll periodically can lead to cumulative errors resulting in penalties.

How to avoid it?

  • Conduct internal audits at least every six months.
  • Use technological tools to validate information.
  • Hire external auditors if necessary.

Explanatory Video on Payroll Administration

On our YouTube channel, we explain in detail how to avoid these payroll management mistakes:

Conclusion

Proper payroll management not only prevents penalties and legal issues, but also improves employee trust and satisfaction. Implementing good practices and leveraging technology are key to efficient and error-free management.

If you need advice on payroll management, contact us and we’ll help you optimize your processes.