How much time do you spend on payroll each month? In some cases, it may feel like too much. Handling payroll can be challenging, and the tax laws surrounding payroll can make the process even more complicated.
Avoid Payroll Mishaps
Here are five payroll tips for small business owners looking to increase efficiency, improve accuracy, and reduce tax penalties.
- Missing payment dates. There’s nothing worse than missing a pay date – for employees or employers. The solution is to create and maintain a payroll calendar. Fortunately, The National Finance Center provides pre-made, downloadable calendars. You may have to adjust the template to fit your needs.
- Paying payroll penalties. If you miss a tax payment by just one day, it could result in a 2% penalty, which increases to 10% after 16 days. Manually paying taxes can be a risk. Use an automated payments tax feature in your payroll software. Check out Forbes’ 9 Best Payroll Services for Small Business Owners for possible solutions.
- Data entry debacles. One misplaced zero can cause endless headaches down the road for business owners. Avoid mistakes by having a second pair of eyes review the payroll and data entry each period.
- Breaking the law. Payroll rules are complicated and can differ from state to state. Fortunately, the American Payroll Association offers a guide to state payroll laws to keep you in the know.
- Misclassifying employees. Trouble lies between independent contractors and full-time employees when it comes to employee classification. The IRS’s classification guide can help you assess employees to help you avoid payroll errors.
You have a lot on your plate as it is. Complicated payroll doesn’t have to be another thing. Following the right advice and working with an experienced payroll provider and software can help minimize headaches. Give us a call if you want to pass payroll off to us. We’d be happy to help.
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