3 Payroll Mistakes
And How To Avoid Making Them
JUNE 3, 2019 EMAIL CAMPAIGN
What is your biggest payroll challenge?
Small business owners tend to struggle with payroll because of the many rules and regulations to comply with. At times, they don’t know they’re making a mistake until they receive a fine from the IRS. Our team is here to help you avoid common payroll mistakes, so feel free to check out our list below!
1. Misclassifying Employees
Mistaking an employee as exempt or non-exempt can raise red flags in tax agencies. Knowing the different types of employees will help you successfully set them up to be paid properly (while avoiding fines):
• Exempt = not eligible for overtime
• Non-exempt = eligible for overtime
• W2 = employee with set salary and work expectations
• 1099 = contractor with a timeline for how long they will work for you
2. Paying Payroll Late
In addition to having upset employees, your business could be breaking compliance laws set by your state. Avoid this by setting up a pay schedule that works for you and your employees making sure to check your state’s payroll scheduling requirements by industry. The most commonly used payroll scheduling options are biweekly or semi-monthly. And always take into account bank holidays.
3. Incorrectly Paying Taxes
Taxes can be tricky and are constantly changing. Failing to pay the proper payroll taxes might bring penalties and interest.
Stay up to date with the required taxes for your small business at the federal, state, and local levels. Remember to check which rates have changed at the beginning of each year (including federal income tax, Social Security tax, Medicare tax, federal unemployment tax, state income tax, state unemployment insurance tax, and local income tax)
At Payroll Vault, you can work closely with a dedicated payroll expert to make sure your business has the most efficient system in place for stress-free, compliant payroll processing.
If you’d like us to review your Payroll scenario, feel free to schedule a FREE consultation or contact the office from Monday to Friday 9:00 am to 5:00 pm at 812-200-2867.
Brittany N. Marshall