On-Time Payroll: 4 Simple Tips to Avoid Penalties

Running payroll isn’t the fun part of owning a business—but getting it wrong can quickly become one of the most painful.

Late payroll doesn’t just upset your employees. It can also trigger costly penalties from the IRS and state agencies. Worse, it damages trust with the people who keep your business running.

Whether you're still handling payroll yourself or using a system that’s not quite keeping up, the risk is real. But the fix? Often simpler than you think.

Here are 4 simple ways to keep your payroll on track, protect your people, and stay penalty-free.

1. Use a Payroll Calendar (and Stick to It)

Why This Matters:

Missing payroll deadlines often comes down to one thing: forgetting when they are.

Different pay periods (weekly, biweekly, semimonthly, monthly) mean different processing cycles, tax deposit dates, and report deadlines. It adds up fast.

What You Can Do:

• Create a year-round payroll calendar that includes:
  
  
  • Pay dates
    
    
  • Processing deadlines
    
    
  • Tax filing and deposit due dates (federal and state)
    
    
• Set recurring reminders in your calendar or task manager at least 2–3 days before each deadline
  
  

If you’re managing multiple states or seasonal workers, build in extra buffer time to review everything—especially during holidays or year-end.

2. Automate Where You Can

Why This Matters:

If you're manually keying in hours or writing checks each period, you’re setting yourself up for delays and errors.

A missed decimal, a wrong pay rate, or a forgotten bonus can create chaos. And fixing it—especially under pressure—only increases your chances of missing tax deadlines or needing to refile.

What You Can Do:

• Invest in payroll software that integrates time tracking, tax filings, and direct deposit.
  
  
• Use automated reminders and task flows so nothing falls through the cracks.
  
  
• If you already have software but it still feels clunky, it might be time to explore a system that’s a better fit for your team’s size and complexity.
  
  

Pro tip: Tools don’t solve problems by themselves. Make sure someone is assigned to monitor and verify entries before each run.

3. Build in a Payroll Double-Check

Why This Matters:

Even with automation, human oversight is key. One small mistake—like selecting the wrong pay group or misclassifying an employee—can delay payroll or trigger tax issues.

This is especially true for companies with hourly workers, variable pay, or multiple pay rates.

What You Can Do:

• Have a second person review payroll before it’s submitted, especially if you’re still DIY-ing it.
  
  
• Use a pre-processing checklist, including:
  
  
  • Are all hours approved?
    
    
  • Are new hires or terminations updated in the system?
    
    
  • Are garnishments or deductions applied correctly?
    
    
  • Have tax codes changed for any employees?
    
    

At Cadence HCM, we build this into every payroll cycle we support. It's one of the easiest ways to avoid last-minute scrambling and surprise penalties.

4. Don’t Wait for an IRS Letter to Fix Things

Why This Matters:

The IRS assesses penalties for late payroll tax filings starting at 2%, and they climb quickly to up to 15%—even on small amounts. And that’s not including interest.

Often, business owners don’t even realize they missed a deadline until the penalty notice arrives.

What You Can Do:

• File early when possible—don’t cut it close.
  
  
• Keep a paper trail of all submissions and deposits.
  
  
• If you do miss something, act fast. The sooner you correct the issue or request a waiver, the better your chances of minimizing the damage.
  
  

And if you're repeatedly getting notices or confused about tax requirements, that’s a strong signal it's time to get help.

Bottom Line: Your Payroll Process Shouldn’t Keep You Up at Night

You started your business to do something you love—not to become a payroll tax expert.

But paying your people correctly and on time? That’s non-negotiable. It’s what builds trust, keeps your business compliant, and protects you from financial penalties that can sneak up fast.

If you’re tired of chasing payroll deadlines or wondering if you’ve done everything right, it might be time to get a partner who lives and breathes this stuff.