As Americans prepare to file their taxes ahead of the annual April deadline, a new survey from The Workforce Institute at Kronos Incorporated reveals an estimated 82 million Americans – more than half of the U.S. workforce – have experienced a problem with their paycheck during their career. The survey also finds payroll errors cost both employees and employers more than just dollars and cents.
The “Engaging Employees through Payroll” survey examines the hidden costs of payroll errors. For example, more than a quarter (26 percent) of hourly workers have been paid too little, while 15 percent say they’ve been paid late. Just one in 20 – six percent – have been overpaid. For the salaried worker, 15 percent say they’ve been shortchanged in their check. Although 16 percent report being paid late, another 23 percent say they’ve been paid early – a nice problem to have! Nine percent have had a paycheck bounce, and overall, at least 10.6 million workers (seven percent) have had a paycheck bounce.
The survey also discovered 42 percent of all employees say taxes and deductions on their paycheck are confusing to read and understand. Year-end tax forms confuse American workers, too. While half say they’re confident they have never had a problem with documents such as an IRS W-2 Form, 35 percent of employees have had a problem such as a mistake. Another 15 percent admit they do not understand their tax forms enough to even recognize an error. Nearly half of American workers (45 percent) say they would feel more engaged with their job if their employer helped them better understand the impact of taxes and deductions on their overall earnings.
One interesting factoid from the survey is what employees do when they are overpaid.
The survey found, on average, American workers say they most likely would need to be overpaid a staggering $463 before alerting their employer to the mistake. It would take more, on average, for salaried employees ($735) to alert their employer if they were overpaid versus hourly workers ($160). Men may be more dishonest than women – over two-times more, in fact – as men, on average, would pocket $623 extra before saying something, compared with $258 for women. Employees can’t claim they didn’t notice the error: more than three-quarters (77 percent) of Americans check their pay stub every payday to make sure their taxes, withholdings, and overall earnings are correct.