Payroll means paying your employees. But, at the same time, it also involves selecting a payroll schedule, calculating salaries, wages, and taxes, and ensuring everything is done accurately and on time.
When you’re running payroll, it can be easy to forget your compliance responsibilities governed by local, state, and federal law. Considering these regulations involving overtime, employee treatment, and income tax are crucial parts of payroll, payroll compliance becomes mandatory for every business owner.
Read on as I discuss payroll compliance and everything else you need to know to stay on the right track.
What Is Payroll Compliance?
Compliance means adhering to IRS and other federal, state, and local tax regulations about how employees are paid. These regulations play out a list of duties that an organization must fulfill, such as:
Social Security and Medicaid taxes (FICA)
Benefits reporting
Employee classification
Unemployment taxes (FUTA)
Reporting employee information and verifying employee eligibility
Employee paycheck withholdings/deductions
Paycheck garnishments
Weekly, quarterly, and annual tax deposits
Quarterly and annual tax filing
Data management and privacy (HIPAA)
Compensation categorization
Health coverage reporting (ACA)
Furnishing documents to employees
The tax code highlights the applicable mandates for you. You’ll find yourself paying costly fines and penalties if you fail to meet them. Even seemingly simple mistakes c… Read More