Your staff is the most important asset for your company’s success…which make payroll your company’s most important administrative task. Your employees need to be confident their wages will be paid on a regular basis. That seems like a simple enough ask, but as any HR manager will tell you, nothing about payroll is simple…especially if you’re a small business trying to handle it all in-house.
10 Payroll Best Practices To Follow
To help out, here are ten payroll best practices you should be following, from processing tips to compliance guidelines:
- Keep accurate records
It’s all in the details! Meticulous record-keeping of staff wages and benefits is essential for the proper calculation of taxes and other deductions and ensuring you are compliant with all state and federal labor laws.
- Correctly classify employees
A revealed up to 30% of U.S. employers misclassified their employees, a mistake that could result in penalties and fees from the IRS. It’s vital that you classify each employee correctly for payroll reporting.
- Maintain consistent payroll policies
Your payroll procedures regarding pay frequency, pay dates, pay methods, reimbursements, etc. should be clear and consistent with every person working for your business, from remote and on-site employees to independent contractors.
- Regularly review payroll procedures
To that end, you may discover the need to reexamine your payment policies as your business evolves or state labor laws change. Always be open to updating your payroll procedures and don’t hesitate to ask your staff for their feedback along the way.
- Consider outsourcing payroll
Smaller businesses often lack the staffing and capabilities to handle payroll. Letting a professional service such as Accu Data handle it for you ensures accuracy and compliance and frees your staff to tackle other needs. For a deeper dive on this topic, check out our article detailing the benefits of outsourcing payroll.
- Utilize payroll software
Manual payroll entry isn’t just time-consuming…it can lead to costly mistakes. Using an automated payroll software system increases efficiency and accuracy. It also offers transparency to staff and allows them to stay on top of their hours earned, paid time off, overtime and more.
- Stay up-to-date with tax changes
Tax rates frequently change and if you don’t stay on top of it all, it could lead to payroll mistakes and even fines. Partnering with a payroll provider like Accu Data will help you maintain compliance with the tax office.
- Follow regulatory compliance guidelines
Similar to taxes, federal, state and local legislation can often change and it can be costly if you don’t stay you adhere to the most recent regulatory requirements. It’s estimated that U.S. businesses spend nearly on non-compliance! Don’t fall into that trap!
- Promptly Deposit Withheld Taxes
A common payroll mistake is failing to deposit withheld taxes and employer-matched taxes in accordance with federal tax deposit requirements. This could lead to late deposit penalties of up to 15 percent of the tax due.
- Protect your employees’ data
Payroll processing involves bank account info, home addresses, social security numbers and other personal information that must be protected. It’s up to you to set up systems that guard your staff and your business from threats that exist outside your organization…and from within.
At Accu Data, we ensure an efficient, safe, compliant and error-free payroll processing experience for all of our clients.
today for a free consultation. We’re also happy to discuss our host of other Human Capital Management (HCM) services, including time and attendance, benefits administration, applicant tracking, and more.