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What To Do If You've Missed Payroll

Missing payroll can be a nightmare for any business owner. Not only do you have to worry about the financial repercussions of not paying your employees, but you may also have to deal with legal consequences, too. However, if you find yourself in this situation, there’s no need to spiral because there are a few things you can do to mitigate the damage.

Missing Payroll

There are a few common reasons why businesses miss payroll. The most common reason is simply that the business doesn't have enough money to pay their employees this month. This can be due to a slow period or unexpected expenses, or due to poor budgeting.

Businesses also sometimes miss payroll because of a mistake somewhere in the payroll process. This could be due to using outdated software, an error in calculating hours worked, miscalculating taxes, or failing to properly process payroll deductions.

Whatever the reason for missing payroll, it's important to take action immediately. The longer you wait, the more damage you'll do to your employees and your business.

Better Budgeting

If you're missing payroll because you don't have enough money, then you need to take a close look at your budget. See where you can make cuts in other areas so that you can free up some cash to cover payroll. You may also need to take out a loan or line of credit to cover the shortfall.

You should also take a close look at your budget to see where you can make changes so that you don't find yourself in this situation again. Ideally, you should have a cash reserve to act as a buffer so that even when an unexpected expense occurs or you have a quiet month, you still have enough funds available to pay your staff on time.

Cash Flow Forecasting

Another tool that can help you avoid missing payroll is cash flow forecasting. This involves estimating how much money will be coming into your business and when, and then using that information to plan your spending. This can help you identify potential problem areas so that you can take steps to avoid them.

Payroll Mistakes

If you've missed payroll because of a mistake in the process, then you need to take steps to correct the mistake and prevent it from happening again. Being paid late or incorrectly anger and frustrates employees, so it's important to take action to make sure that this doesn't become a regular occurrence. Otherwise, you risk losing good employees.

If you're using out-of-date software, consider upgrading to something more modern that will automate some of the payroll processes and help you to avoid mistakes. If you're miscalculating hours worked, consider using time-tracking software so that you have a more accurate record of employee hours.

It's also worth considering outsourcing payroll to an accountant who can handle the process for you. This will help you to avoid the hassle and stress of dealing with payroll yourself, which can be a huge help when you're busy with other aspects of running your business.


Whatever the reason for missing payroll, it's important to communicate with your employees. They need to know what's going on and when they can expect to be paid. Be honest with them about the situation and keep them updated on what's happening.

If you're having financial difficulties, let them know and explain what steps you're taking to rectify the situation. In the wake of a payroll error, transparency is key to maintaining employee trust.

Final Thoughts

Missing payroll can cause a lot of damage to your business and employees, but there are steps you can take to mitigate the damage. Better budgeting, cash flow forecasting, and payroll mistakes can help you avoid missing payroll in the future. Communicating with employees is also key during these difficult times.

If you're really struggling with payroll, hiring an accountant to advise you and manage your payroll is the easiest and most effective way to ensure that your business can stay afloat. In addition to putting efficient payroll systems in place, they will also help you to budget and forecast your cash flow properly to ensure that you always have enough money to meet your financial obligations.



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