Maintaining payroll compliance and managing administrative tasks can prove daunting for businesses, particularly small to medium sized companies. Many have started turning to third-party outsource resources for to handle the complex processes.

Quality and qualified employee leasing services assume the responsibility of payroll taxes managing administrative duties associated with calculating and withholding payments and staying up to date on constantly changing employment laws and regulations

Please visit https://peocosts.com/ to learn how to strategize your company’s approach to payroll with the help of employee leasing, an approach that gives you peace of mind knowing these services will ensure your procedures are updated to comply with any changes in the laws.

Understanding Payroll Compliance

Payroll compliance refers to the processes a company uses to ensure it adheres to laws and regulations regarding employee wages, overtime pay, tax withholdings, benefits, record-keeping, and any other part component of pay. 

It also entails ensuring staff is accurately and promptly paid, that all payroll taxes are reported and paid to the proper agency by the deadlines. While the focus is on meeting tax obligations, the following are also key factors with compliance.

• Employee classification:  Workers must be accurately classified as employees or contractors. This impacts unemployment insurance contributions and mandatory tax withholdings.
• Wage calculation: There are laws in most jurisdictions that specify formulas to calculate pay and ensure that workers receive a minimum level of compensation.
• Tax reporting: Mandatory payroll taxes will be paid quarterly or annually depending on your company’s tax status or size.

When working with employee leasing services, these representatives assume the risks and responsibilities that come with HR compliance. Your company is relieved of much of the burden associated with leading a group of employees.

Non-compliance can mean substantial financial and operational consequences that hinder business growth 

This is a primary reason that struggling businesses reach out to employee leasing services to provide guidance in navigating compliance regulations. Visit – 8 Crucial Steps to Ensuring Compliance with HR Laws | Employment Law – steps to ensure compliance with HR laws.

What Are Common Payroll Mistakes

Payroll compliance requirements vary from one jurisdiction to the next. These further challenge business leaders and can lead to mistakes, especially for those with a distributed or remote workforce. An employee leasing service can help develop procedures to comply with all the relevant regulations. 

Without this resource, companies can readily make one or more of the following common mistakes.

Failing to stay updated on regulations

From deadlines to withholding rates and forms to submission methods, there are specific regulations that govern how payroll taxes are withheld and submitted. There are many requirements for compliance and these constantly change. 

It’s up to each individual business to stay current on the changes and follow these as they manage payroll. Without consistently reviewing the laws to ensure compliance, you run the risk of inaccuracy or missed deadlines. 

Fortunately, with experts handling the task, compliance is assured. Click here to learn how employee leasing works.

Missed deadlines for payroll reporting

The IRS imposes monetary penalties with interest charged in the US for late payroll tax reporting and payments. In other jurisdictions, similar tools are often used by regulators to ensure prompt remittance and adequate withholding of the employer’s social security, insurance program, and healthcare contributions.

To avoid these penalties, the leasing provider will help businesses incorporate an efficient payroll compliance system with ample time to prepare forms, file and submit payment. Tools such as automated withdrawals are encouraged for simple and straightforward payments and meeting deadlines.

Misclassifying staff and contractors

Employees or contractors who are incorrectly categorized can affect how payroll tax withholdings are calculated, potentially leading to major repercussions. When the IRS believes a company willfully misclassifies workers to avoid FUTA and social security contributions, they can impose penalties that can include criminal charges.

The employee leasing service follows the FLSA – Fair Labor Standards Act for worker classification. If there are any questions or confusion, the IRS provides a form, SS-8, to request clarification directly.

Completing the wrong IRS form

Different forms are required to report information with for the IRS and completing the wrong one can result in penalties and delays. Fortunately, those specializing in payroll management and HR administrative tasks fully understand which forms need to be completed.

The IRS Forms & Instruction page is helpful for companies trying to match the information to the proper form. 

The best place to start is how the workers are classified, whether you need an independent contractor form or a form for an employee. This helps determine how to report compensation paid and the necessary withholdings.

Final Thought

For business leaders who struggle to develop a comprehensive compliance plan, consult a professional employee leasing service. 

You have the advantage of specialized training and expertise not to mention dedicated assistance on a range of HR issues. The providers stay current on employment laws and the best practices.