Top 10 Payroll Mistakes To Avoid (MLS 2026)

Payroll processing is one of the most critical responsibilities in any business.

Even small payroll mistakes can create:

•employee frustration

•accounting discrepancies

•tax penalties

•government notices

•reporting problems

Fortunately, most payroll issues are preventable.

The following are the:

👉 Top 10 Payroll Mistakes To Avoid

when using MLS 2026.

1. Not Updating Tax Tables Each Year

⚠️ This is one of the most common payroll mistakes.

Federal and State withholding tables change regularly.

If your:

•tax tables

•deduction formulas

•withholding amounts

are outdated:

👉 payroll calculations WILL be inaccurate.

This can result in:

•under-withholding

•over-withholding

•payroll corrections

•tax penalties

Best Practice

Update:

•Federal tax tables

•State tax tables

•deduction formulas

at the beginning of every payroll year.

2. Incorrect Employee Setup

Many payroll problems originate from:

•incorrect employee setup

•wrong pay methods

•missing withholding information

•incorrect payroll periods

If setup data is wrong:

👉 every payroll calculation may also be wrong.

Best Practice

Carefully verify:

•W-4 data

•marital status

•exemptions

•pay methods

•commission rates

•overtime settings

•payroll periods

before processing live payroll.

3. Skipping Payroll Review Before Printing Checks

⚠️ Never rush payroll processing.

Always review:

•Gross Pay

•deductions

•overtime

•commissions

•Net Pay

before printing checks.

Correcting payroll BEFORE checks are issued is far easier than:

•reversing payroll

•correcting taxes

•adjusting accounting

Best Practice

Always review Payroll Reports before final processing.

4. Forgetting Payroll Accounting

Some users:

•print payroll checks

but

•forget to run Payroll Accounting

This leaves:

•payroll totals incomplete

•General Ledger postings unfinished

•payroll periods open

and prevents future payroll processing.

Best Practice

Always perform:

👉 Payroll Accounting

immediately after payroll checks are processed.

5. Not Reconciling Payroll Tax Payments

⚠️ Payroll taxes are heavily monitored by government agencies.

If taxes are withheld but:

•not paid

•paid incorrectly

serious penalties may result.

Best Practice

Run:

•Payroll Tax Reports

•Zone Tax Summaries

regularly and reconcile:

•tax liabilities

•deposits

•payment history

carefully.

6. Ignoring Timeclock Errors

Missed punches and incorrect time entries can create:

•payroll disputes

•overtime errors

•incorrect labor costs

Best Practice

Review Time Clock records regularly:

•before Gross Pay processing

•before payroll calculations

•before final payroll approval

Correct errors promptly.

7. Using Manual Overrides Instead Of Fixing Setup Problems

⚠️ This is a very common mistake.

Some operators manually change payroll numbers instead of correcting:

•tax tables

•formulas

•employee setup

•payroll defaults

This may temporarily fix:

•one paycheck

but future payrolls will continue calculating incorrectly.

Best Practice

Always correct:

👉 the underlying setup problem

instead of repeatedly overriding payroll calculations manually.

8. Advancing Too Much Sick Pay Or Payroll Advances

Providing excessive:

•payroll advances

•unearned sick pay

•unearned vacation pay

can create financial losses if:

•the employee leaves

•repayment is impossible

•labor laws prevent recovery

Best Practice

Use:

•payroll advances

•deficit sick pay

carefully and conservatively.

9. Not Backing Up Payroll Data

Payroll records are:

•legal records

•accounting records

•tax records

Losing payroll data can create severe business problems.

Best Practice

Create backups:

•before payroll

•after payroll

•before year-end closing

•before tax processing

regularly.

10. Performing Year-End Closing Too Early

⚠️ Once Payroll Year-End Closing is performed:

•current totals are archived

•records reset for the new year

If:

•W-2 processing

•payroll adjustments

•final payrolls

are not completed first:

👉 corrections become much more difficult.

Best Practice

Before Payroll Year-End Closing:

•finish all payroll processing

•print W-2s

•verify tax totals

•print final payroll reports

•reconcile accounting

THEN perform year-end closing.

Bonus Recommendation:

Don't Ignore Payroll Reports

Payroll reports are your:

•audit trail

•payroll verification system

•tax reference

•accounting validation

Important Reports To Run Regularly

•Payroll Period Summary

•Payroll Tax Report

•Quarterly Summary

•Zone Tax Summary

•Time Clock Report

•Year-To-Date Totals

Final Payroll Reminder

⚠️ Payroll accuracy depends on:

•proper setup

•careful review

•regular reconciliation

•consistent procedures

MLS 2026 automates much of the payroll process, but:

👉 management review is still essential.

A few extra minutes reviewing payroll carefully can prevent:

•major accounting problems

•tax issues

•employee dissatisfaction

•reporting corrections

later.

Recommended Companion Sections

This section works closely with:

•Payroll Processing

•Gross Pay Calculation

•Payroll Accounting

•Payroll Tax Setup

•Payroll Reports

•Employee Time Clock

•Payroll Troubleshooting

•Payroll Year-End Closing

Together, these sections provide a complete payroll management and payroll accuracy workflow within MLS 2026.