Managing payroll can be a complex affair that demands a lot of effort, documentation, and tracking. The ever-changing rules and guidelines have made the modern payroll management landscape more complicated than ever. As a result, errors arise that could result in delays in payments for employees, which may hurt businesses and prove costly for owners. To manage payroll processes more effectively, take a look at some common payroll mistakes and simple ways to avoid them.  Misclassifying employees and contractors  Every business must carefully categorize its employees (as employees or independent contractors) to dock the right pay. Errors while doing this result in having to look through old payment records to make adjustments to employee pay. It could lead to dissent among the team and cost the business. Moreover, according to the Fair Labor Standards Act (FLSA), all employees must get overtime pay for any hours worked over 40 hours per week unless they are explicitly classified as exempt. Making errors here could lead to FLSA-related fines for employers. To manage this, hire reputed payroll service providers and avoid listing freelancers as employees. Only hire contractors and freelancers through leasing companies to avoid any penalties for misclassification. Making calculation errors Making errors in payroll calculations can also cost businesses money and labor.