Do you control your pay stub? Payroll errors could be costing you income

Canadian workers could be missing out on income due to payroll errors they don’t notice because they don’t carefully monitor their paychecks, a new study suggests.

More than half of Canadians say they don’t carefully monitor the amounts of income and deductions on each statement, according to a recent study by Payments Canada, which surveyed more than 1,500 employed Canadians.

Meanwhile, nearly half of those surveyed said they pay more attention to their social media channels than pay details, and nearly 38 percent indicated they would likely overlook a payroll discrepancy.

“It’s not something we were taught growing up: how to read and interpret these payment receipts,” said Kristina Logue, chief financial officer of Payments Canada, a nonprofit organization that owns and operates the country’s payments clearing and settlement infrastructure. . .

Logue believes the shift from physical payment to digital options has contributed to a misunderstanding of paycheck details. Nearly nine in 10 working Canadians are paid by direct deposit, while six percent are paid by paper check and three percent by electronic transfer, according to the survey.

“We are no longer presented with that paper stub that falls on your desk or in your mailbox to check your check,” he said. “Right now, Canadians are adopting a ‘hope for the best’ strategy when the payment hits the account.”

With about $971 billion paid to Canadians each year in wages and benefits, unintentional errors in payroll do happen, Logue said, especially since payments are still often manually entered by employers.

Although half of working Canadians simply check the pay amount when it’s deposited into their bank account, it’s also important for employees to understand the details of their pay statement, said Ian Calvert, vice president and director of HighView Financial Group.

Paycheck deductions for taxes, pensions and other group insurance plans are often the source of payroll errors, he said. “If you see an error, it could be because twice the regular amount was deducted from your paycheck for a group plan or your tax deduction was miscalculated and increased,” he said.

Understanding the details of each pay statement is especially important for non-salaried employees because their paycheck calculations often vary each week and are more complicated than those for salaried employees, Calvert added.

Although about 35 percent of respondents said reviewing their paycheck information is daunting, more than 20 percent say they would feel uncomfortable or embarrassed asking their boss to explain their paycheck information.

Janet Gray, a financial planner at Money Coaches Canada, thinks employers could better explain the details of employees’ pay stubs.

While some workers just don’t bother to check their pay stubs, Gray said some employers aren’t making it easy either, noting that the frequent use of acronyms can make some pay stubs “indecipherable.”

“Even when I look at these pay stubs, and I look at them every day, sometimes I think, ‘What does this mean?’ Some of them just aren’t very consistent,” she said.

Gray thinks that standardizing certain terms for common insurance and pension deductions could make things easier. But part of the problem is a lack of financial education among Canadians, he said. Many workers know their general salary, but don’t understand that it’s different from how much actually ends up in their pocket after deductions, Gray said.

“What they don’t understand is the disconnect between their gross amount and the amount in their bank account.”

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