![\"Heartland](\"https:\/\/mitchell1.com\/wp-content\/uploads\/2024\/12\/Heartland-Payroll-_no-color_WEB-1.jpg\")
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Of all the tasks it takes to keep your business running, timekeeping and payroll processing are probably the least exciting and most routine. But that doesn\u2019t mean that getting it right is always easy. Or that getting it wrong is no big deal.<\/p>\n
Noncompliance with employment, labor and payroll tax laws can put your business under a microscope, and even lead to fines and penalties. 33% of employers make payroll errors, and\u00a0roughly 40%\u00a0of small businesses pay an average of $845 a year in IRS penalties because of mismanaged\u00a0payroll<\/a>\u00a0processes.<\/p>\n To keep your business from becoming a statistic and your costs in check, it\u2019s worth auditing your payroll processes to ensure you don\u2019t fall victim to these common pitfalls:<\/p>\n Like anything else in business, employing and paying workers generates a lot of paperwork. And preserving those records is important. Different federal, state and municipal agencies have rules defining what type of information employers should keep. For example, the Fair Labor Standards Act (FLSA) requires that individual employee\u2019s records include no fewer than 14 different points of identifying information about the worker, the hours they work, and the wages they earn.<\/p>\n In addition to guidelines about what type of information employers should gather and store, laws also define how long that data should be kept. For example, the law requires that you hold on to the following documents for at least four years:<\/p>\n It\u2019s also important that employee information be 100 percent accurate. After your employees fill out their W-2s, make sure to double-check the following information:<\/p>\n For a more comprehensive list of labor and\u00a0payroll tax<\/a>\u00a0recordkeeping requirements, visit the\u00a0IRS’<\/a>\u00a0or\u00a0DOL’s<\/a>\u00a0websites.<\/p>\n Generally, the federal government collects payroll taxes on a pay-as-you-go basis. Almost half of all small businesses get fined every year for late or missed payments.<\/p>\n There are several recurring payroll tax deadlines you need to remember.\u00a0A biweekly or monthly deadline<\/a>\u00a0is set by the IRS to deposit both withholding taxes and your share of taxes \u2014 including federal income tax, Social Security and Medicare taxes, and Federal Unemployment Tax. If you fail to make a timely deposit, you are subject to a penalty of up to 15 percent,\u00a0depending on how late the deposit is<\/a>. There are also quarterly and annual returns that you must file with your W-2s. For a complete list,\u00a0check out the IRS’ website<\/a>. Also, keep in mind you will likely be responsible for remitting payroll taxes on a state or even local level, which may require different information and\/or be due at different times.<\/p>\n There are a lot of potential slip-ups in the withholding process. Misclassifying employees is one common mistake (we’ll get into that more later). Other potential pitfalls include:<\/p>\n A non-exempt employee (generally an hourly worker) is entitled to overtime pay while an exempt employee is not. When your non-exempt employees work more than 40 hours in a workweek, you owe them time and a half pay for those hours.<\/p>\n An employee must meet three criteria to be exempt from receiving overtime pay:<\/p>\n Employees who don\u2019t meet these criteria are considered non-exempt and owed overtime pay under federal law, no matter the circumstance. For example, if an employee works overtime without advance approval, they\u2019re still entitled to overtime pay. Asking non-exempt employees to work off of the clock, or compensating them with time off in lieu of overtime pay would also result in noncompliance with the law.<\/p>\n Keep in mind we\u2019re only covering federal laws. States and even some municipalities have their own overtime regulations that business owners must also follow.<\/p>\n Confusing an employee with a contractor can also cost you. Businesses are generally not required to withhold or pay taxes on payments to independent contractors who are subject to self-employment tax. If workers are your employees, you owe payroll taxes on their wages and taxable benefits.\u00a0Accidentally misclassifying an employee as a contractor<\/a>\u00a0would lead to failure to withhold and remit payroll taxes. Which as we mentioned before, comes with its own set of fines and penalties.<\/p>\n If you are unsure about a worker\u2019s status, you can request an IRS determination by filling out\u00a0Form SS-8<\/a>. If you\u2019ve already made the mistake of misclassifying employees, the IRS offers relief through the\u00a0Voluntary Classification Settlement Program<\/a>. You can also contact your attorney or legal counsel for advice on how to proceed if you believe you\u2019re noncompliant.<\/p>\n As a small business owner, you\u2019ve got a lot on your plate. The right\u00a0payroll software<\/a>\u00a0will eliminate the confusion and stress that often accompanies paying employees, filing forms and meeting all your tax requirements. Working with a provider that offers SHRM-certified HR professionals to give you a hand whenever you need it is helpful too. Heartland offers these services and more.<\/p>\n For more information and to request a FREE demo, click the link below.<\/p>\n1. Poor Record Keeping and Inaccurate Data<\/h3>\n
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2. Falling Behind on Payroll Tax and Filing Deadlines<\/h3>\n
3. Withholding Errors<\/h3>\n
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4. Exempt or Non-Exempt?<\/h3>\n
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5. Contractor or Part-Time Employee?<\/h3>\n
Ready to process payroll and tackle compliance with confidence?<\/h2>\n
Get Started Today!<\/b><\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"
![\"Heartland](\"https:\/\/mitchell1.com\/wp-content\/uploads\/2023\/11\/Heartland-Payroll-_no-color_WEB.jpg\")
Of all the tasks it takes to keep your business running, timekeeping and payroll processing are probably the least exciting and most routine. But that doesn\u2019t mean that getting it right is always easy. Or that getting it wrong is no big deal [\u2026]<\/p>\n","protected":false},"author":1,"featured_media":10344,"parent":0,"template":"","meta":{"_acf_changed":false,"content-type":"","inline_featured_image":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":""},"shopconnection-category":[1630],"shopconnection-tag":[1554],"class_list":{"0":"post-7274","1":"shopconnection","2":"type-shopconnection","3":"status-publish","4":"has-post-thumbnail","6":"shopconnection-category-shop-management","7":"shopconnection-tag-heartlandheartland-insurancemanager-se","8":"entry"},"acf":[],"_links":{"self":[{"href":"https:\/\/mitchell1.com\/wp-json\/wp\/v2\/shopconnection\/7274","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mitchell1.com\/wp-json\/wp\/v2\/shopconnection"}],"about":[{"href":"https:\/\/mitchell1.com\/wp-json\/wp\/v2\/types\/shopconnection"}],"author":[{"embeddable":true,"href":"https:\/\/mitchell1.com\/wp-json\/wp\/v2\/users\/1"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mitchell1.com\/wp-json\/wp\/v2\/media\/10344"}],"wp:attachment":[{"href":"https:\/\/mitchell1.com\/wp-json\/wp\/v2\/media?parent=7274"}],"wp:term":[{"taxonomy":"shopconnection-category","embeddable":true,"href":"https:\/\/mitchell1.com\/wp-json\/wp\/v2\/shopconnection-category?post=7274"},{"taxonomy":"shopconnection-tag","embeddable":true,"href":"https:\/\/mitchell1.com\/wp-json\/wp\/v2\/shopconnection-tag?post=7274"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}