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Compliance services Payroll Compliance Checklist: What You Need to Avoid Penalties in 2023 Payroll compliance is always an important topic for employers, as doing payroll accurately and adhering to all payroll legislation is not only beneficial but necessary for avoiding penalties and fines. In this article, we'll help you understand payroll compliance for 2023 and learn how to avoid potential financial penalties as an employer. Stick around to explore the specific requirements to ensure you're compliant with the latest payroll legislation. 1. Understand Payroll Legislation Fully understanding payroll legislation is no easy task, as it requires investing a lot of time to ensure you're up-to-date with the latest changes. A good way to stay ahead of the curve and make sure you have a clear understanding of these laws is to attend webinars, seminars, and conferences, as well as follow professionals on social media. Even though it may be tedious, having a clear grasp of payroll legislation is critical, as violating it can mean facing fines and penalties. Moreover, by managing payroll and taxes correctly, employers can reap all kinds of benefits, including the following: Ensuring proper employee compensationFunding different programs like unemployment insuranceReducing the risk of penalties and lawsuitsBoosting employee morale to improve workplace culture » Learn whether businesses are legally obligated to run payroll 2. Keep Payroll Records Up to Date Manually processing payroll can cause a myriad of issues, such as inaccuracies, missed deadlines, and delays. To minimize potential issues, it’s essential to keep anything that affects payroll up-to-date. This includes employee information such as addresses, promotions, changes in hours worked, etc. In addition to this, it’s important to keep a record of all payroll activity and documents. Although businesses are generally required to keep all payroll records for at least three years, it could even be longer depending on the local rules. Furthermore, documents that involve calculations, such as time cards and deduction information, should be kept for at least two years. By keeping the records up to date, businesses can ensure compliance and have documents to reference in the event of an audit or legal dispute. » Payroll record retention: see what you should know for IRS compliance 3. Keep Track of Important Deadlines Businesses often make the mistake of forgetting important deadlines when it comes to filing payroll taxes and other forms. To avoid this, it's crucial to keep a track of all deadlines where they can easily be found by those responsible for payroll. Moreover, ensure your whole team is up to date and that you don't miss a deadline, as this can trigger penalties that an efficient system will help you avoid. 4. Always Make Sure Your Employee Classification Is Compliant Misclassifying employees as independent contractors is a serious mistake, as only full-time employees have taxes withheld from their paychecks. Independent contractors, on the other hand, file their taxes differently and must be kept separate from employee classification. Mistakes in this area can be quite costly for both workers and businesses, so it's important to correctly classify all employees according to the law to avoid any potential issues. 5. Implement Payroll Automation As we previously mentioned, manual payroll processing can lead to a lot of errors, which is why it's beneficial to implement payroll automation. Automating the payroll process not only reduces the chances of mistakes but also helps employers by streamlining the process and making it more efficient. Additionally, automatically generated pay slips empower employees, as they receive a clear breakdown of their income, tax payments, pension contributions, etc. This encourages transparency and builds trust between employers and employees. » Want to streamline your payroll? See the essential policies and procedures to follow Avoid Penalties Through Streamlined Payroll Payroll management is a complex task that involves more than just calculating wages. By following the steps outlined in this article, businesses can ensure compliance and reduce the chances of mistakes. From tracking important deadlines to implementing payroll software with all the right features, there are many ways employers can make their payroll processes more efficient and accurate. » Need help streamlining your payroll? Read TBR's payroll software reviews and find the solution to get the job done.

Payroll 5 Expert Ways to Manage Payroll for Small Businesses Efficiently Although managing payroll can be a daunting and time-consuming task for small business owners, having the right system in place can make this process less tedious and stressful. Establishing error-free payroll processing is important not only for staying organized but also for making sure taxes are filed properly and employees are paid on time. Here are 5 expert ways that will help make payroll management easier for small business owners. » Payroll software: see whether your small business needs one 1. Register for an Employer Identification Number Registering for an Employer Identification Number (EIN) is the first step in managing payroll for small business owners in the US. This unique, nine-digit number is required before you can establish payroll for your employees. In addition to identifying your small business for tax purposes, your EIN is also often required when applying for licenses, filing payroll taxes, or opening a bank account. Depending on where your business is based, you may need to obtain a state-level EIN on top of your federal one. Nevertheless, the process for obtaining an EIN is straightforward and can be done quickly and easily online. Once you have your EIN, you can move on to the next step in managing payroll for your small business. » EIN vs. tax ID: learn the fundamental differences 2. Understand and Comply With Wage Laws Understanding and complying with wage laws is an essential part of managing payroll for small businesses. There are both federal and state laws that businesses must abide by, and it's important to understand the legal obligations associated with payroll. It's essential to double-check your payroll process to ensure employees are getting paid accurately and on schedule. Finally, you want to make sure you're always paying the correct amount and taking care of the following taxes: Employment taxes/Federal Insurance Contributions Act (FICA) taxes – Social Security and Medicare Local tax – may vary based on the regionState tax – calculated according to the state you're inIncome tax per employee – the amount withheld from employee wages for federal and/or state taxes By understanding and complying with wage laws, you can ensure your payroll process is compliant with federal and state regulations as well as accurate. » Looking to reduce payroll tax? See 5 legitimate ways to do so 3. Manage and Monitor Your Cash Flow Managing and monitoring your cash flow is an important part of managing payroll for small businesses. As more problems can arise when there isn't enough money to pay employees, it's important to identify cash flow issues early on. By monitoring your cash flow regularly, you'll be able to identify any problems such as overstaffing or overpaying. During financially stressful periods, it's advised to delay vendor payments or collect outstanding customer payments before delaying wages or downsizing. This can help ensure your employees are being paid in a timely manner and avoid cash flow problems. 4. Decide on Salary Status and Pay Frequency The salary status and pay frequency are important decisions for small business owners that will have a direct impact on payroll costs, compliance requirements, and employee satisfaction, contributing to the overall workplace culture. It's important to understand the implications of each decision and make sure they align with the needs of your business. Salary Status Salary status refers to how wages are computed for employees. Generally, there are two types of salary statuses—an hourly rate (for non-exempt employees) and a salary (for exempt employees). The right salary status for your small business will depend on the position of the employee and the needs of your business. Choosing the wrong salary status may lead to legal and financial implications, so it's important to understand the differences between the two before making a decision. Pay Frequency Pay frequency or pay schedule refers to when and how often you pay your employees. It's essential to be compliant with federal and state laws to ensure you meet the minimum payday requirements of your area. Generally, there are several different payroll frequencies, including weekly, bi-weekly, and monthly payments. It's important to select the frequency that is best for your business, taking into account employee preferences and the cost of processing payroll payments. » Want to reduce payroll costs? Here are 5 money-saving strategies to do so 5. Set Up a Payroll System Setting up a payroll system helps calculate and manage employees' paychecks. It provides small business owners with a cost-effective, convenient, and accurate way to pay their employees on time. Investing in good payroll software can prove to be a very wise decision in the long run, as it will result in streamlined payroll processing. There are three options to manage paychecks: Manual: You can do payroll by hand, although this can be time-consuming and prone to errors. Outsourced: Outsourcing your payroll and taxes means hiring someone to do these for you. Software: Automated payroll is cost-effective, accurate, and time-saving, in addition to storing records required by the Fair Labor Standards Act (FLSA) and the Internal Revenue Service (IRS). These three options should be carefully evaluated to choose the one that works best for your business. Efficiently Manage Your Small Business Payroll Payroll laws are constantly changing, and it's important to stay compliant to avoid potential legal issues. Incorporating payroll software can help you streamline the process and save time and money while staying compliant with all the relevant laws and eliminating stressful paperwork and administrative problems. » Need help managing your small business payroll? Read TBR's payroll software reviews and find the right solution for your business' needs.

Payroll Payroll Review Checklist: 6 Necessary Items to Verify Payroll Accuracy Is running payroll an easy and quick thing to do? Not at all—it can often be time-consuming and confusing, with a high probability of making many errors that typically go unnoticed. However, maintaining an accurate payroll is of the utmost importance because employees need to be paid, and you'll want to avoid penalties. To help you develop a streamlined payroll process, here are 6 items to consider to verify payroll accuracy. » Learn how to ensure error-free payroll processing 1. Check Important Employee Details The first thing you can do is determine and double-check employee details. Here's a list of information you should be assessing: NameAddressDate of birthBank details 2. Classify Employees Correctly The next aspect of verifying payroll accuracy is ensuring all employees are classified correctly. The best strategy is to have a proper record of all employees, as well as taxes, overtime wages, and potential minimum wage laws. Unfortunately, if this is done incorrectly, the company could owe back wages and taxes and face penalties. Simply put, all employee details need to be in the payroll system at all times. » Learn how to avoid employee misclassification 3. Track Time and Attendance While it would be wise to track the time of all employees, it's especially critical to monitor staff members who earn hourly wages and might be eligible for overtime. This aspect of verifying payroll accuracy focuses on tracking how much time employees have worked. To confirm that the information is accurate, be sure to review the time before running payroll. 4. Comply with Payroll Laws and Regulations Unfortunately, there's no one-size-fits-all approach to payroll management, primarily due to the fact that different states and cities will have their own sets of rules and regulations. Therefore, you'll need to properly calculate wages and overtime and withhold the correct amount of times. The payroll team must timely deposit the corresponding tax liabilities with the relevant federal, state, and local tax agencies and file payroll tax returns to the appropriate federal, state, and local jurisdictions. Here are some of the federal legislation rules in the US employers should know: Federal Labor Standards Act (FLSA): This rule puts together standards for minimum wage, overtime pay, youth employment, and recordkeeping.Federal Insurance Contributions Act (FICA): This is a federal payroll tax to fund Medicare and Social Security Programs.Federal Unemployment Tax Act (FUTA): This is a bill that establishes a payroll tax on any business with employees, and the revenue is used to fund state unemployment programs.Equal Pay Act (EPA): This law prohibits wage discrimination based on gender. In other words, men and women are given equal pay for the same work.Davis-Bacon Act: This law requires federal contractors and subcontractors to pay local wages on federally funded public works projects. » Want to reduce payroll tax? See 5 legitimate ways to do so 5. Examine Payroll Transactions Although this might seem like common sense, it's always better to be confident that you're withholding the right amount for your employees and paying the correct level of income taxes. Remember, laws can change, employees might move, and tax withholding options may be altered for different types of employees, as is often the case with remote employees. 6. Automate the Payroll Process If you're refraining from automating the payroll process, be warned that manual data processing is generally error-prone and can be time-consuming, in addition to the errors potentially costing your company. However, this can be avoided by integrating payroll software into your corporate infrastructure. Since they automatically calculate payments and taxes, these programs are generally accurate. Ensure Payroll Accuracy With Payroll Software In the end, it would be a prudent move to at least consider using payroll software with the right features that can help your business avoid unnecessary errors and cause less stress to employees. Opting for a good automated payroll solution is an easy way to ensure you've covered all the items from the checklist above to verify payroll accuracy. » Not sure which payroll software to choose? Read TBR's payroll software reviews to find the solution that best works for your business.

Payroll How Payroll Processing Fees Work in 2023 In today's economic landscape, more businesses are tightening their belts and squeezing every penny to ensure they can survive any headwinds that form in the marketplace. A critical area for budget-conscious companies to monitor relates to payroll processing fees, which are costs typically priced on a per-employee or per-check basis. And, of course, this is in addition to the base account fee. While payroll processing fees may vary in 2023, employers can anticipate spending anywhere from $20 to $100 per month, as well as $2 to $15 for each employee. In this article, we'll break down these costs and see what affects them. » Other payroll challenges in 2023: see what employers can expect Preliminary Considerations When it comes to processing payroll, many tasks need to be performed, including the following: Employee formsHours workedOvertime costsEmployer taxesPayroll and income taxesIRS depositsPayroll service And this is just the tip of the iceberg! » Payroll considerations: see the essential employer policies and procedures Common Factors That Affect Payroll Processing Fees As previously noted, payroll processing fees will vary based on many circumstances and factors. Some of the most common components employers should consider are whether the company is outsourcing its payroll-related activities or paying an employee to process payroll using in-house payroll software. Meanwhile, the following list of considerations could help you calculate how much you'll spend on payroll services: The number of employeesThe states employees reside in and whether they're remote employeesEmployees' pay frequencyIf the business adds tax filing servicesPayment method: direct deposit or paper checks payment When you're crunching the numbers, understanding these factors can be of tremendous assistance to the success of your company and achieving your goal of doing a better job balancing the books. Additional Costs Understanding the total cost of the payroll process can ensure you make the right decisions about managing payroll and ensuring payroll compliance. Unfortunately, when too many mistakes happen, additional costs may arise, further affecting your bottom line. But what can increase your payroll costs? The two most common issues are payroll errors and payroll taxes. Payroll errors: These can happen when there's manual input rather than automated insertions, potentially leading to a greater chance of mistakes that can cost employers plenty of money.Payroll taxes: If the organization pays an incorrect amount or submits an incorrect filing, the company can face hefty fines and penalties from the federal or state government. » Want to reduce payroll taxes? Learn 5 legitimate ways to do so Expertly Handle Processing Fees in 2023 Let's face it—when processing payroll by yourself, it will be a time-consuming affair that can require an immense amount of resources. This is especially true if you're not professionally trained in this area. Your tasks would consist of ensuring everyone's payroll deductions are correct and taxes are accurate, which can easily result in mistakes. Because these tasks can cause problems if done incorrectly, it would be smart to adopt payroll software instead. This option is accurate and fast, and it will facilitate the necessary compliance with laws, regulations, and rules outlined by various jurisdictions. » Need help choosing payroll software? Check out TBR's payroll software reviews and browse the available resources.

Hr function Payroll Tax Outsourcing: 3 Opportunities and Threats for HR Payroll outsourcing is quickly becoming a popular tactic for many businesses looking to cut costs or streamline their payroll operations. It's the act of transferring payroll administration responsibilities to a third-party source on behalf of the company. Many companies have been turning to this alternative for their payroll and other tax-related duties - and it is not something that is done lightly. Although opting for outsourcing rather than in-house payroll handling comes with its benefits, there are some threats associated with this process as well. While outsourcing can significantly streamline payroll tax handling, employers are still held liable for federal employment taxes, even if they outsource these tasks. With this in mind, here are some payroll tax outsourcing opportunities and threats for HR. » HR outsourcing solutions: see whether your business needs ASO or PEO 3 Opportunities and Threats of Payroll Tax Outsourcing for HR Here are three opportunities and threats of payroll tax outsourcing: 3 Opportunities of Payroll Tax Outsourcing Improved control and visibilityBetter administrationReduced costs 3 Threats of Payroll Tax Outsourcing Additional costsNo in-house knowledgeCompliance and calculation errors 3 Opportunities of Payroll Tax Outsourcing Let's go into detail about the three opportunities payroll tax outsourcing offers: Improved Control and Visibility Outsourcing to another party that can manage payroll data online accurately can be highly beneficial. With today's technology, decentralized HR can benefit from digitized payroll data thanks to bolstered data visibility. And, of course, this can substantially increase HR efficiency and reduce errors. Better Administration It might seem counterintuitive, but outsourcing can support HR administration in general tasks, including personal file management, taxation, Social Security, and other day-to-day assignments. Ultimately, outsourcing can assist the HR department in making well-informed decisions. Reduced Costs Finally, outsourcing can save money on hiring additional personnel, especially during the busiest times of the year. Overall, payroll outsourcing can trim onboarding costs and scale back on training costs. » Learn whether HR functions still outsource their services 3 Threats of Payroll Tax Outsourcing Now, let's examine the three threats of payroll tax outsourcing: Additional Costs Companies often learn that outsourcing payroll could be more expensive than in-house processing due to multiple reasons. The most common one is that some suppliers might encourage clients to use their services by providing combo deals, meaning payroll firms specializing in this field may add fees for extra and usually unwanted services. As a result, it would be necessary to clearly define what services you need to avoid these fees. No In-House Knowledge Internal knowledge can be diminished at a significant pace for two reasons. The first is that outsourcing can result in your HR team forgetting how to do payroll. The second is that if you terminate your working relationship with an outsourcing partner, you'll need to train an HR team to do payroll. Compliance and Calculation Errors Failing to ensure payroll compliance and calculation errors are the two most common mistakes by payroll outsourcing service providers, which is ironic considering many businesses hire them to avoid these in the first place. However, these mistakes can cause delays in paychecks and, if they become frequent enough, this can lead to fees and penalties. » Payroll tax vs. income tax: learn which you should pay as an employer Outsource Payroll Tax Smartly Payroll administration tasks are known to be overwhelming and difficult. Although engaging with a third-party source might not be the perfect solution for every employer, it's an easy fix for a complex problem. However, if this isn't something you'd consider, adopting payroll management software could be a better alternative since it almost guarantees compliance and data accuracy. » Not sure which payroll software to choose? Read TBR's payroll software reviews and find the one that best suits your specific needs.

Payroll 4 Essential Payroll Policies and Procedures Every Employer Must Use If you're wondering whether a payroll policy is integral for companies, the simple answer is yes. It's a critical component of running a business, managing accounting and human resources departments, and ensuring the organization remains payroll compliant. To avoid unnecessary fines, unemployment lawsuits, and even interest in unpaid wages, employers must ensure they maintain an efficient payroll process that can facilitate accuracy and support timely employee compensation. To help you out in this process, we've put together a brief guide on payroll laws and procedures you should adhere to as an employer. » Are you legally obligated to run payroll? See the answer for your business 1. Pay Frequency Establishing and maintaining a steady stream of pay frequency is essential. While different businesses may use various payroll schedules, be it a weekly schedule or a bimonthly one, nearly every US state today has a minimum pay frequency law to determine the longest possible period between paydays. So, for example, while the longest period in Alaska is semi-monthly, in other states like Idaho the longest span will be a month. On the other hand, Alabama doesn't have any pay frequency laws. » Need help establishing steady payroll? See our tips for streamlined payroll processing 2. Overtime Pay Properly calculating overtime pay and monitoring it is crucial for both large and small business payrolls, as it can be costly and needs to be by the book. Today, companies are legally required to pay non-exempt employees overtime if they clock in more than 40 hours per week. According to federal law, employees who work anything over these hours must be paid 1.5 times their regular rate. Because some states may have additional laws, it's imperative to pay attention to the various labor rules and regulations because you may be legally required to repay wages plus late fees and other penalties if you're not in compliance with overtime laws. 3. Payment Methods Today, there are many different ways to compensate employees, be it through a physical check or direct deposits. For the most part, employers will typically select payment methods, although it would be smart to check state laws to figure out what methods are permitted or restricted. As an example, some state laws across the country may prohibit paying employees with payment cards or direct deposits based on several factors, such as the following: Employees didn't offer permissionThe company doesn't cover payment feesEmployers failed to notify employees of any related fees they were responsible forThe organization refused to provide additional payment options, such as paper checks or cash. 4. Payroll Taxes Finally, payroll taxes are an essential aspect of maintaining a workforce. Although compliance is paramount, what does it even look like? Well, there are many components to complying with payroll taxes. First, there's calculating payroll taxes correctly, especially when it comes to remote employees. Second, filing and paying taxes on time is vital since you don't want to be slapped with fines and penalties. Finally, businesses must consider both federal and state tax rates when calculating and filing taxes for the year. Because it can be a complicated ordeal, the best solution to avoid any headaches—financial and otherwise—is to incorporate payroll software with the right features into the firm's infrastructure. By doing so, employers can automate the tax filing process and ensure everything is streamlined. » Want to reduce payroll taxes? See 5 legitimate ways to do so Streamline Your Payroll Process Businesses of every size and in each industry have to comply with payroll laws, whether at the federal or state level—there's no other way around it. However, while this requires a tremendous amount of resources, there are several measures you could employ to avoid stressful paperwork and administrative problems. Ultimately, you can streamline the payroll process by incorporating automated payroll with the right software that can help you achieve these objectives, be it automating payroll tasks or determining a jurisdiction's payroll laws. » Need help streamlining your payroll? Read TBR's payroll software reviews to find the best resources available.

Payroll Payroll Records Retention: What You Should Know for IRS Compliance Record keeping might not be the most exciting aspect of operating a business, running an office, or managing a department. However, keeping records is critical to ensure you keep track of your expenses for budget purposes, prepare for tax return season, and have an organized company. While the specific business you're in can impact the type of records you have for federal tax purposes, it's vital to keep records as long as necessary to prove income, apply the correct payroll deductions, and confirm any inquiry from the IRS. And, yes, for IRS compliance, you need to maintain all records for employment taxes for a minimum of four years after filing the fourth quarter of the year (depending on the state your business is located in, it might even be five years). » Want to ensure payroll compliance? Learn how to avoid hefty fines How to Ensure Compliance With the IRS? While nobody wants to receive a visit from the IRS, it will make sure your company is compliant through routine compliance checks and potential examinations. Here's what these entail: Compliance check: The IRS will determine if taxpayers adhere to recordkeeping and information reporting requirements, which is different from requesting a review of tax returns and other related information.Examination: This would consist of a review of the company or individual's accounts and other financial information to ensure the information submitted to the IRS is in compliance with tax laws. The tax-collecting agency would also verify that the reported amount of tax is correct. How to Avoid Being Flagged by the IRS? Of course, what every employer and business wants to know is how exactly you can avoid being flagged by the IRS. First of all, it's vital to figure out why a company may be flagged—it could result from unreported earnings, excessive write-offs compared with income, incorrect paperwork and receipts, or refundable tax credits. The best way to refrain from being targeted by the IRS is to keep detailed records of everything and have any and all tax-related paperwork readily available to avoid delays. » Want to reduce your payroll taxes? See 5 legitimate ways to do so What Records Should Be Kept for the IRS? Now, what types of records should be kept for the IRS anyway? Learning exactly what documents you need could save your business since an audit by the IRS could financially damage your company. So, here's what you should generally have within arm's reach: Employment Identification Number, or EINThe amounts and dates of all employee compensations, pension payments, and annuitiesEmployee information such as names, addresses, Social Security Numbers (SSNs), and positionsDates of employment for every employer (past and present)How each employee is paid, including wage type (hourly or salary), pay frequency (weekly or bi-weekly), and payment method (direct deposit or paper checks)A list of dates and the amounts of tax deposits you made » Payroll tax vs. income tax: learn which you should pay as an employer Ensure IRS Compliance Through Careful Record Keeping Every office will decide how it wants to collect, manage, and store payroll records. While some choose locked cabinets, others decide to ditch manual payroll and adopt the online alternative, as this option can be more reliable and affordable. Indeed, every business should consider using payroll software with the right features to store payroll records online, as their speed and accuracy can ensure better compliance with laws and regulations. » Want to adopt payroll software? Read TBR's payroll software reviews and find the best one for your company's needs.

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