Understanding Payroll Compliance and Why It Matters

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Why Payroll Compliance Matters

It doesn’t matter if you have one employee, a handful of employees, or 100+, there’s no room for mistakes when it comes to payroll compliance.

At SurePayroll, we understand the importance of compliance, which is why we provide our customers with a variety of resources. These include:

  • Free compliance guidelines: Access to a suite of HR resources to help maintain compliance.
  • Labor law posters: When you use our labor law poster compliance service, we guarantee your business will be protected from costly government fines.
  • Business forms: Access to all the business forms you need, ranging from I-9s to employment applications and everything in between.
  • Alerts and reminders: It’s not easy to stay current with compliance changes, so we provide alerts and reminders to ensure that you always know what’s going on.

Common Small Business Payroll Compliance Mistakes

With so much legislation – along with regular changes on the local, state, and federal levels – it’s easy to make payroll compliance mistakes. Since a mistake can lead to fines and penalties, it’s important to prevent these at all costs.

Below are five of the most common payroll compliance mistakes:

  • Employee misclassification: A common example is misclassifying an employee as a contractor.
  • Miscalculating overtime: Not only can this result in fines and penalties, but it will also anger your employee(s).
  • Failure to maintain accurate records: You can avoid this potential problem by using an online payroll provider.
  • Neglecting to report taxes: In addition to paying applicable taxes in full, you must adhere to all deadlines.
  • Improperly withholding garnishments: Since this is relatively uncommon, it’s difficult to understand the process and maintain compliance.

Knowledge of these compliance mistakes allows you to pinpoint potential problems before they cost you time and money.

Compliance Terms to Know

There are many compliance-related terms to learn and understand, with these among the most important:

  • Fair Labor Standards Act (FLSA): This act regulates minimum wage, overtime laws, child labor, and recordkeeping.
  • Federal Unemployment Tax Act (FUTA): A tax paid by employers to fund the oversight of individual state unemployment programs.
  • Federal Insurance Contributions Act (FICA): FICA tax is made up of an employer contribution and employee withholding. Employers must withhold part of Medicare and Social Security taxes from employee wages while contributing an equal amount.

SurePayroll Will Keep You Compliant

From payroll compliance training to the ability to run compliance reports, SurePayroll has you covered.

With our help, you never again have to worry about compliance errors causing you stress, wasting your time, and costing you money.