While the end of the month is certainly the best time for many employees, many employers tend to dread it. Ensuring that all of your hardworking team is paid on time and correctly is absolutely essential. However, payroll can be a massively complicated, time-consuming, and stressful task for employers.
Calculating and dispensing payroll requires a huge amount of time, as you need to ensure every penny is accounted for and that all of your tax, medical, and legal obligations as an employer are being met. You cannot afford to get payroll wrong, which is why it is essential to hire professional payroll services for your company.
If you are considering payroll services for small business owners, read on to find out the most common mistakes that people make when they try to manage payroll by themselves.
- Payroll Tax Mistakes
The worst mistake that businesses typically make when it comes to payroll is not filing and paying the correct payroll taxes. The IRS estimates that a whopping 40% of businesses fail to correctly pay payroll taxes.
As a result, businesses can be fined thousands of dollars every single year as a penalty. You need to know which payroll taxes your business is liable for and which agencies these taxes should be going to. This is why you need to hire the best payroll service for small business.
- Not Hiring Professional Payroll Services
Put simply, administering payroll is a highly complex task with massive financial and legal consequences for those who fail to do it correctly. That is why you should be looking for the best payroll service for your business needs who can take care of all of this for you.
For example, if you are Googling “payroll services near me” and are located in Los Angeles County, then a qualified payroll solutions provider such as https://avitusgroup.com/encino-california-los-angeles-county-peo is exactly the kind of service you should be using. You cannot afford to get this wrong.
- Incorrect Classification of Your Staff
Another dangerous payroll mistake that many business managers make is to incorrectly classify employees as contractors, or vice-versa. These are two distinct categories of workers and cannot be confused.
If a member of staff has all of the requirements and responsibilities as an employee but you classify them as a contractor on your payroll, the IRS will notice and begin investigating you. Incorrect worker classification is seen as a tax dodge and carries serious legal and financial penalties.
- Not Providing Records as Required
Did you know that you are legally required to provide documentary evidence of payroll to any member of staff that requests it, for any reason, at any time? If an employee cannot access their payslips and tax information, they are unable to file their taxes correctly or apply for loans.
It is your responsibility to provide this to all current and former employees whenever they ask for it. Fortunately, you can use online payroll services to instantly email the correct documentation to anyone who needs it. Failing to do this is in breach of the law in most states and carries strict penalties.
Essential Resources for Business Management
Understanding the importance of effective payroll services is essential for good business management. For more tips on managing your business and ensuring total resilience, we have got you covered. Make sure to consult our expertly-curated Management guides for insider tips and better business management in 2021 and beyond.
