Learn About the Biggest Payroll Challenges Your Business May Face and the Best Ways to Combat Them
Running a business is difficult enough. Trying to stay on top of all the laws and compliance issues affecting payroll while running your business is almost impossible. Payroll can create many challenges for anyone who is not solely focused on payroll compliance and concerns.
Read on to learn more about the biggest challenges payroll may place on small businesses and how to combat these challenges.
The Many Moving Parts of Payroll
Payroll encompasses many employee issues. It involved benefits, taxes, minim wage requirements, exempt and hourly employment statuses, and more. Each state has their own mandates, compiled with federal mandates affecting payroll.
With all these different moving parts working together to create an employee’s paycheck, it can be difficult to stay on top of changes and compliance issues that may occur. For instance, the minimum wage requirements are changing almost every year in many states. While the federal minimum wage has remained stagnant for many years, many states are gradually increasing the minimum wage every year. You must stay compliant with these legal changes to ensure your employers are accurately paid.
Insurance laws are also evolving. Federal and state laws are changing the minimum requirements for employers depending on how many employees they employ. Small businesses with fewer than 25 employees (in some states) may have the same or similar rules as large fortune 500 companies. These changes are full of legalities that can be difficult to understand and even harder to follow.
Let’s not forget the pieces of payroll relating to paid and unpaid medical leave, overtime, paid time off, retirement savings, and voluntary benefits. Each of these pieces affects payroll. In some cases, it can even affect the taxes on each paycheck.
Which brings us to another important moving piece of payroll: payroll taxes. Payroll taxes include the ta money employees must pay as well as the tax money paid by employers. Unless you understand the tax laws, these taxes may get skipped, underpaid, or grossly overpaid. As a result, you can have serious legal and financial problems on your hands.
What Can You Do to Help Combat These Payroll Issues?
One of the best ways to help you stay compliant and on top of the laws and changes states and the federal government can place on payroll is to hire trusted advisers to help you. Accountants can help you understand and implement tax laws into your payroll system. They can help you set up your payroll to stay compliant. They can also stay abreast of the laws and help you make changes as needed.
Hiring a lawyer may also be helpful when dealing with payroll. The lawyer can help you understand wage and hour laws and implement the correct payroll laws into your payroll process. They can help you stay abreast of changes to minimum wage, overtime, and other employee payroll laws.
However, accountants and attorneys can be a costly expense to your business. They may cost much more than you allotted for payroll expenses. Another option to help you stay compliant with payroll laws and deal with issues that may come up is to work with a payroll specialist. Your payroll specialist can take the work out of payroll. All you need s to give your specialist information for each employee (name, address social security number, direct deposit information, etc.). Then your specialist can make sure your payroll follows all the laws and regulations to help keep you compliant and employees paid.