As an employer, it is your responsibility to ensure compliance with payroll taxes. There are many things you need to know in order to stay compliant, including: – Withholding taxes from employee wages – Filing quarterly and annual payroll tax returns – Making timely payments to the government Failure to comply with payroll taxes can result in significant penalties, so it is important to understand the requirements and make sure you are in compliance.
Understanding government regulations clearly
Adhering to all government regulations regarding payroll is essential for employers. Failing to do so can result in issues with the IRS and costly fines. Adhering to local payroll laws for each employee is mandatory.
Avoid non-compliance mistakes and penalty
Most payroll laws are relatively straightforward, but non-compliance can result in significant penalties. Small business owners in particular want to avoid mistakes that can have a negative impact on their bottom line.
Classify independent contractors separately
Since independent contractors are required to pay different taxes, employers may want to reduce costs by not making a worker an employee. However, misclassifying an employee can have severe consequences.
Keep required payroll records
The risks associated with not retaining records for the required period of time include the potential for an audit and lack of evidence to support compliance with laws and regulations. Companies have been unsuccessful in legal proceedings due to inadequate record retention.
Keeping a track of overtime and paying on-time
Although it may be a simple error, not tracking your employees’ overtime and fringe benefits can create problems later on if an employee feels like they were shortchanged on their pay. The best way to avoid these issues is to rethink your payroll process.
Introduce a payroll software
Automating payroll can save time and avoid errors. Spreadsheets can be time-consuming and are subject to human error. Automated payroll software can help calculate employee hours, wages, and payroll records accurately.
Outsource your payroll to an expert
If you are running a small business, it may be in your best interest to outsource your payroll to a provider. Your payroll service provider can take care of payments, paperwork, and compliance for you, freeing up time for you to focus on other aspects of running your business.
Maintain a payroll compliance checklist
When creating your payroll, it is important to be aware of both federal and state regulations. You can create separate sections for each when organizing your checklist. Be sure to take a closer look at local laws as well, to make sure that you are in compliance with all relevant regulations.
Understanding payroll regulations and complying for small businesses who are expanding rapidly to different regions can be a daunting task, outsourcing such services to experts such as ExroAsia makes your business safe and secure in the long run.