Tricky Parts of Payroll You Need to Get Right

quality-payroll • May 31, 2022

It’s common for interviewers to ask prospective employees why they want to work for them or why they want that job. There are a lot of different reasons the interviewee might give, but the underlying reason for nearly all of them is that they need a job that will pay the bills. That makes payroll one of the more important tasks your business handles. Of course not all parts of payroll are simple. There are some trickier parts that are critical for you to get right.

Correctly Classifying Employees

Do you know how to classify your employees? There are two different ways to classify employees: salaried and hourly. There is also the independent contractor classification, but technically independent contractors and employees are not the same thing (which is another important classification distinction). Misclassifying employees could cause problems for taxes and making sure that you’re paying them properly.

Tax Withholding

Tax withholding may sound simple enough. After all, you should be withholding a certain amount based on what you’ve agreed to pay your employees, assuming they are salaried or hourly, and not independent contractors. Once you start working in benefits, it can get a bit more complicated. Some benefits are pre-tax benefits, while others are based on income after taxes have been taken out. Make sure you’re withholding the proper amounts from each employee’s paycheck, since inaccuracies with tax withholding could land you in some hot water with the IRS.

Overtime

Overtime should be calculated on a weekly basis. Any employees who are not considered exempt must be paid 1.5 times their hourly wage for any time worked over 40 hours. Again, that should be something that is easy enough to calculate, but some businesses have a tough time with that. This is also where correctly classifying employees comes into play. If you misclassify an employee as being exempt when they aren’t, your payroll isn’t going to be accurate, your employee will likely be quite put out about the money they’re not getting paid, and you could end up in legal trouble due to this payroll inaccuracy.

Accuracy is a big deal when it comes to payroll. Mess it up and not only will you almost certainly be facing disgruntled employees, but you could also potentially end up dealing with fines (especially if the IRS gets involved). It can be a lot of pressure, but don’t worry. Quality Payroll is here to help you with all of your payroll needs.

Could your business use some help with payroll? Click here to contact Quality Payroll and see how we can help your business today!

Boosting Productivity with Payroll Tools
December 17, 2024
In the contemporary business landscape, the drive for efficiency and productivity is more intense than ever. With the constant push to streamline operations and maximize resources, payroll automation has emerged as a pivotal solution for businesses of all sizes. This technological advancement not only simplifies payroll processes but also enhances accuracy and compliance, providing a significant competitive edge.
Wage Garnishments
December 3, 2024
Wage garnishments represent a significant financial and administrative challenge for both employers and employees. This legal process, which involves withholding a portion of an employee's earnings to pay off a debt, is governed by a complex web of federal and state regulations. Employers, particularly those operating in states like Utah with specific garnishment laws, must navigate these regulations with precision to ensure compliance and maintain a positive work environment.
Legalities of Remote Work
November 17, 2024
Explore the legalities of remote work & HR compliance in the digital age. Learn how small businesses can navigate challenges & ensure data security.
Time Fractions and Overtime
November 3, 2024
Ensure payroll compliance with accurate time fractions & overtime calculations. Discover tools & methods to streamline payroll for small businesses.
HR Audit Guide
October 17, 2024
Discover the HR audit guide for Utah small businesses, focusing on compliance & best practices to streamline audits & enhance organizational health.
Small Business Guide to Inclusion
October 3, 2024
Master ADA compliance with our small business guide to inclusion. Equip your business with tools to embrace diversity & meet ADA standards.
FMLA for Small Businesses
September 18, 2024
Navigate FMLA for small businesses with our guide. Understand eligibility, legal obligations & leave tracking to ensure compliance in Utah.
EEO Compliance
September 3, 2024
Ensure EEO compliance & foster an inclusive workplace with our guide for small businesses. Learn about anti-discrimination laws & best practices.
Employment Laws in Utah
August 17, 2024
Explore Utah at-will employment laws & exceptions. Learn how to navigate legal compliance for small businesses in Utah's at-will employment state.
Small Business Tax Benefits
August 3, 2024
Maximize small business tax benefits in Utah with HSAs, FSAs & retirement plans. Discover strategies to enhance financial efficiency & savings.
More Posts
Share by: