What happened
Payroll mistakes are common, and they are expensive. An EY analysis finds that these errors cost organizations $289,722 per 1,000 employees every year, as reported by HRD Canada.
The headline figure comes from the report's summary. The report does not say, in what we have seen, which currency the figure is in, how the cost is broken down, or which errors rank as the most common. HRD Canada's piece is framed around the most frequent payroll errors in workplaces, so the full article is the place to check those details.
Even without the breakdown, the scale is clear. Divide the number by 1,000 and each employee carries roughly $290 of error cost a year. For a team of 250, that is about $72,000. Treat that as a rough guide, not a forecast for your own business.
Why it matters if you are hiring
Payroll errors are rarely a software problem alone. They come from people: a missed overtime rule, a wrong pay rate on a new hire, a late change to a timesheet, a misclassified worker. Each of those is a hiring and staffing decision as much as a finance one.
If you are growing headcount, every new hire is another chance for an error. Offer letters, start dates, pay rates and benefits eligibility all need to match what payroll actually processes. Fast hiring, seasonal ramp-ups and the use of contract workers make the gaps wider.
It also changes how you assess candidates. Payroll administrators, payroll coordinators, accounting clerks and HR generalists who handle pay data carry real financial responsibility. In Canada, they need working knowledge of provincial employment standards, statutory deductions and remittance deadlines, which differ by province. A candidate who can describe how they caught and corrected an error is worth more than one who only lists the software they have used.
Owners and controllers should also ask whether one person holds too much of the process. A single point of failure in payroll is a cost risk and a continuity risk.
One thing to do this week
Pull your last three payroll runs and list every correction, off-cycle cheque and employee query. Sort them by cause: new hire setup, overtime, time entry, classification or deductions. The top cause tells you whether you need a process fix, training, or a different skill set on the team.
Traverse Staffing places finance, operations and contract professionals, including payroll and accounting staff, with employers across Canada and the US, so teams can fill these seats with people who have handled the work before.