7 Tips to Save on Payroll Costs


7 Tips to Save on Payroll Costs

Without question, employee labor is one of the greatest expenses that employers face each month. However, it may surprise you to hear that it can also be one of the most poorly tracked or controlled expenses. Why is that?! At first glance, you might say that seems counterintuitive given the timeless importance of controlling costs.


There are many reasons why this is the case. Perhaps the most common reason is that historically it has been difficult or overwhelming from an administrative standpoint to track time. Or perhaps it has even been too costly to accurately track time. Today, however, these problems have been solved, yet many employers are unaware of the simple, affordable solutions available for conveniently tracking time, and ultimately, reducing the cost of payroll.


While a full list could be lengthy, here are 7 quick ways employers can reduce the cost.


  • Pay based on actual time worked, not scheduled time – It is common for employees to be paid based on what they are supposed to work, not on actual minutes worked. Due to the realities of human nature and employee habits, unfortunately, this means employers are paying for all deviations from the ideal, such as late arrivals, early departures, extended breaks and lunches, personal errands and perhaps even employee absences. This lack of accurate tracking can literally cost an employer thousands every month in added wages and payroll taxes.


  • Stop rounding and approximating employee punches – In some cases, employees are being asked to manually record in and out times. Most commonly, they will round to the nearest 15-minute increment for each punch (four punches per day). When employees round punches, it’s nearly always in their favor, often resulting in 15 to 45 minutes of overpaid wages per day… per employee. This is very costly! Solve this problem with effortless, automated time tracking.


  • Track employee lunches and breaks – Employees are generally entitled to paid breaks and a lunch break (unpaid) each day. But how frequently do breaks or lunches end early? Rather, due to life’s happenings, how often do they run long?! When employers don’t track these occurrences, it results in lost productivity and wages. When tracking is in place, however, employees can take the time they inevitably need at their own expense, not the employer’s.


  • Set threshold alerts for part-time and overtime hours – It is common for part-time employees to run over their permitted time, or more commonly, for full-time employees to accrue extra minutes throughout the week resulting in overtime. To minimize overrun hours start using system alerts to remind employees and supervisors that an employee is reaching their specified time threshold.


  • Reduce administrative time – It is no secret that time is an expense. Cut countless hours from the payroll process each year with automated timekeeping, directly reducing the administrative expense.


  • Reduce payroll errors – Payroll errors can be very costly, not only in terms of dollar miscalculations, but also in the cost to reprocess, reprint and reconcile mistakes. The solution is simple. Minimize payroll errors with automation.


  • Reduce overstaffing with scheduling – Employee scheduling takes tremendous time. Without the right tools, it is common for overstaffing to occur, over-scheduling of specific employees resulting in overtime, and other costly issues. However, when timekeeping is combined with advanced scheduling, supervisors can easily avoid these costly occurrences.



There are many ways, both small and large, that employers save with simple, affordable timekeeping. Contact us to learn more about how we can help you lower the cost of payroll.