5 Common Payroll Mistakes

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Many business owners see payroll as one nasty task … why? Because one tiny mistake can quickly become a costly error if you are not in compliance or you’ve missed a state or federal filing deadline.

Here are 5 common payroll mistakes that business owners face:

  1. Deadlines. Do you know all of the deadlines for federal, state, county and municipal tax deposits? They don’t all often fall on the same exact date each year. One of the most common payroll tax mistakes is missing deadlines!
  2. W-2 Errors.W-2’s are long, intimidating forms. Do you know what goes in each box? Do you know which boxes need to be completed and which ones you’re free to “skip?”
  3. Having Only One Payroll Professional. You may believe that having one dedicated fulltime payroll professional in the office is the much more attractive solution versus outsourcing. But, do you have a backup employee on-site that is adequately trained in the event that something happens to your current payroll manager? What if she or he falls ill, needs to take a vacation or unexpectedly leaves your Company? Payroll service providers keep payroll services in motion, even when your employees are off-site or away.
  4. Filing. Where does your office keep time sheets, cancelled checks, W-2s, specific employee records and more? If an IRS auditor asked you to pull up payroll data from 5 years ago, would you be able to retrieve it?
  5. Misclassification. Your company may be in the growth phase, and it’s often within this phase that we see a growing number of independent contractors. But are they really all IC’s? If they are misclassified and meant to be filed as employees, businesses can be held liable for employment taxes following an IRS audit. (For more information on misclassification, join us next week. We will be diving deeper into misclassification in our next blog)

Leaving payroll to the professionals will eliminate all of the above-mentioned payroll mistakes, and will deliver peace of mind surrounding payroll tax compliance. And, it’s not too late to consider payroll outsourcing for 2013. In fact, many payroll service providers provide a flexible integration process, regardless of what time of year it is.

Whether your company decides to engage in a payroll-only solution or a full-suite administrative outsourcing solution such as a Professional Employer Organization, your company is sure to save time, money, and headaches.

Employer Solutions Plus provides its clients with a variety of payroll administration solutions. To learn more, simply contact us.