The Payroll Blog
News, tips, and advice for small business owners
5 Payroll FAQs for 2019
Ready or not, 2019 is just a couple of weeks away. As a small business owner, the new year is an important time to set your business up for success, which includes evaluating payroll.
While it is possible to put your payroll on cruise control with our Auto Payroll feature, you can’t set and forget payroll forever. Each year, certain information will have to be evaluated for accuracy. Because you’re busy prepping all of the things for year-end, we gathered a list of a frequently asked questions related to your 2019 payroll.
Q. Why does my employee’s first check of the calendar year have different wages, taxes or net pay when no changes were made to the employee profile?
A. The reason is likely one or more of the following:
- The employee may have previously met a federal or state tax wage limit which resets in the new calendar year and the taxes are now being withheld.
- Federal or state agencies made a change to a tax rate, wage base limit, withholding table, or added new taxes. Please visit federal or state websites to review any changes.
- The employee previously met a limit to a specific earning or deduction which starts over in the new calendar year so the earning or deduction is reflected on their paycheck.
Q. Do I need to update and/or reset my employees’ time off benefits?
A. Many employers set up time off benefits as “use them or lose them”, which means employees must use their time off or risk losing the available days at the end of each year. If like most businesses you offer specific time off benefits within the calendar year, you’ll want to set them up so that at the beginning of a calendar year those time off accruals will change based on your policy.
SurePayroll Customers: To update your time off policies for 2019, log in to your payroll account after processing your last payroll for the year but prior to processing your first 2019 payroll. Go to “Company” in your payroll account and click on “Edit Balances.” To view your time off policies, from the “Company menu,” select “Company Time Off.”
Q. Do I have to reset my payroll schedule for the new year?
A. The good news is if you use a payroll service, you are likely covered when it comes to resetting your schedule for the new calendar year. Most services will automatically reset your payroll schedule based on the frequency you have decided to pay your employees. The four most commonly used pay frequencies are: weekly, bi-weekly, semi-monthly, and monthly. Depending on where you conduct business, you may get to choose your pay frequency, but your state may also mandate the pay frequency for your business. You’ll also want to note any upcoming bank holidays and plan accordingly if they coincide with a regularly scheduled payday.
SurePayroll Customers: Once you’re reviewed your payroll schedule to see if any paydays fall on bank holidays, you’ll need to decide if you want to pay your employees the day before or after a holiday or weekend, then be sure to select “pay the day before or after a holiday or weekend”. To view your payroll schedule, go to “Company” and then click on “Schedule.” The first holiday of 2019 you’ll want to be aware of is Martin Luther King Jr. Day on January 21st. While you may still be running business, the banks are going to be closed.
Q. When do I need to distribute W2s / 1099s to employees?
A. When it comes time to file taxes, your employees will need to have their W2s and 1099s in hand. There are requirements around when you must issue these forms: employers need to provide W2s / 1099s to employees before January 31.
SurePayroll Customers: We know that getting your W2 and 1099 forms out on time is just another item on your to-do list, so we aim to have forms posted for customers by December 31.
Q. I got a Notice of Unemployment Rate change – what do I do?
A. While agencies can send out rate notices at any time throughout the year, many do so as one year closes and a new one starts. Common agency notices to look out for are a Notice of Unemployment Rate Change, Notice of Filing Frequency Change, and a Deposit Requirements Notice. These changes will affect your payroll, so it’s important to share with your payroll provider if you have one.
SurePayroll Customers: If you’ve received an agency notice, simply contact us via phone, email or chat, and we will be sure to update your payroll accordingly. One thing to keep in mind is that some state agencies no longer send updates via mail. If this applies to your state, be sure to log in to your state tax agency or contact the agency with any questions. When doing this, you’ll want to keep your Employer Identification Number (EIN) handy to make the process smoother.
Spending a few minutes evaluating your payroll processes and employee information can ensure that you’re starting the year on the right foot, and helps alleviate the need for adjustments and corrections throughout the year. With payroll and taxes changing every year, it can be confusing and time consuming to keep up. Check in with our first article about tax changes to expect in 2019, which discusses proposed tax brackets and more.
Additionally, year-end is a great time to sign up with, or switch, payroll providers. If you’re interested in getting started with SurePayroll, learn more here.