CHELMSFORD, Mass.,

As Americans file their Form 1040 U.S. Internal Revenue Service (IRS) income taxes ahead of the April 18 deadline, a new survey from The Workforce Institute at Kronos Incorporated reveals an estimated 82 million1 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 and explores the vital role payroll professionals serve in building an engaged workforce while directly impacting the 152 million2 workers who make up the American workforce.

News Facts

  • Paid too little, too late, or not at all: 54 percent of Americans have had a paycheck problem, while salaried, hourly, and gig (i.e. freelance / contract) workers each face different challenges.
    • 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, though, which is more than hourly and gig workers combined.
    • While still a small group, gig workers might be the toughest to pay correctly. One in five (20 percent) have been paid late; one in five (20 percent) have been paid too little; and 16 percent say they’ve had their paycheck direct deposited into the wrong account.
    • Overall, at least 10.6 million3 workers (seven percent) have had a paycheck bounce.
  • How much ‘extra’ cash would you pocket? More than 13.6 million4 American workers report being overpaid and not everyone scrambles to return it.
    • The survey found, on average, American workers say they must likely 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 paystub every payday to make sure their taxes, withholdings, and overall earnings are correct.
  • Living paycheck-to-paycheck makes payroll errors costlier: 56 million5 American workers have paid a personal bill late because of a payroll error.
    • Almost three out of five employed Americans – 58 percent or 87 million workers and their families – live paycheck-to-paycheck, according to the survey, while hourly employees (65 percent) are more likely than salaried employees (52 percent) to report this.
    • Payroll errors have forced over one-third (37 percent) of American workers to make a late payment on a bill such as their car loan, credit card, mortgage, or apartment/home rent.
    • Salaried employees (45 percent) are more likely than hourly employees (29 percent) to have made a late payment because of a payroll error.
  • Perplexed by paychecks: Almost 64 million6 Americans say their paystub is hard to read.
    • The survey 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.

Supporting Quotes

  • Joyce Maroney, director, The Workforce Institute at Kronos
    “Payroll professionals support more than 152 million American workers every payday – and their efforts often go underappreciated. For organizations seeking to gain an edge in their employee engagement initiatives, the payroll department is a valuable resource capable of making a vital and instant impact. To unlock payroll’s true potential, it must be relieved of the burden created by outdated, manual, and often spreadsheet-based processes. Providing modern tools and technology will not only reduce the number of costly and potentially engagement-ending errors, but it will allow payroll experts to excel as true knowledge workers capable of taking on a more strategic and proactive role in supporting organizational transformations.”

Supporting Resources

About Kronos Incorporated

Kronos is a leading provider of workforce management and human capital management cloud solutions. Kronos industry-centric workforce applications are purpose-built for businesses, healthcare providers, educational institutions, and government agencies of all sizes. Tens of thousands of organizations — including half of the Fortune 1000® — and more than 40 million people in over 100 countries use Kronos every day. Visit www.kronos.com. Kronos: Workforce Innovation That Works.

Survey Methodology

Please cite the above research as the “Engaging Employees through Payroll” survey conducted by The Workforce Institute at Kronos. This online survey was conducted by Regina Corso Consulting on behalf of The Workforce Institute at Kronos between Feb. 23-28, 2017 among 1,013 employed U.S. adults, aged 18 and older. Figures for age, gender, education, income, and region were weighted to bring them into line with their actual proportions in the U.S. population. Because the sample is based on those who agreed to participate, no estimates of sampling error can be calculated. For more information on the survey methodology, please contact [email protected]

Footnote 1: Calculation based on the U.S. Bureau of Labor Statistics report from January 2017 that estimates there are 152.08 million employed people in the U.S.: 152.08M x 54% = 82.12 million.

Footnote 2: Per the U.S. Bureau of Labor Statistics report from January 2017, there are 152,081,000 million employed people in the U.S. (Page 4, Summary Table A)

Footnote 3: Calculation based on the U.S. Bureau of Labor Statistics report from January 2017 that estimates there are 152.08 million employed people in the U.S.: 152.08M x 7% = 10.64 million.

Footnote 4: Calculation based on the U.S. Bureau of Labor Statistics report from January 2017 that estimates there are 152.08 million employed people in the U.S.: 152.08M x 9% = 13.68 million.

Footnote 5: Calculation based on the U.S. Bureau of Labor Statistics report from January 2017 that estimates there are 152.08 million employed people in the U.S.: 152.08M x 37% = 56.26 million.

Footnote 6: Calculation based on the U.S. Bureau of Labor Statistics report from January 2017 that estimates there are 152.08 million employed people in the U.S.: 152.08M x 42% = 63.87 million.

###

© 2017 Kronos Incorporated. All rights reserved. Kronos, the Kronos logo, and Kronos Workforce Ready are registered trademarks and Workforce Innovation That Works is a trademark of Kronos Incorporated or a related company. See a complete list of Kronos trademarks. All other trademarks, if any, are property of their respective owners.