Payroll 101: The Facts About Payroll Compliance
Do you find it difficult to keep up with payroll compliance?
How about with the guidelines in the face of changing HR regulations and technological advances?
Of course, you appreciate that compliance is critical for any company. As a business owner, you must stay up-to-date on new industry developments regarding payroll compliance to avoid steep fines and other penalties.
At minimum, there are annual changes to the laws surrounding payroll. In addition to ongoing updates, guidelines continue to shift in response to changes at the local, state, and federal levels. Often, these changes happen quickly, but regardless of speed, there are immediate legal ramifications for your business if you fail to comply.
With new statutes like the Affordable Care Act, don’t find yourself in over your head.
Case Study: Hank & Payroll Compliance
Consider Hank, the owner of a medium-sized IT company.
Up until recent changes in payroll compliance, Hank was having a relatively easy time navigating the system. He knew how to withhold local, state, and federal taxes from his employees’ wages and other earnings. However, Hank was also struggling with some of the other regulations around payroll compliance.
For example, while Hank knew how important it was to pay matching contributions to Medicare and Social Security, as well as to submit regular payments, or Federal Tax Deposits, to the right government entities, he did not have all the answers.
The threat of back tax liabilities, stiff penalties, and interest on unpaid balances worried Hank; he wanted to ensure that he was correctly following all steps of the process. There are numerous other penalties in place that are designed to encourage timely payment of withheld payroll, social security tax, and employment tax. Hank knew he was responsible for collecting and paying these fees and was concerned that he might unintentionally fail to do so.
Payroll Penalties Can’t Touch Me: Or Can They?
“Unlawful retention” refers to funds that are not appropriately submitted to the government. This is the basis for penalties, and payments on interest may be ordered as well. Depending on the number of people employed by the business and the amount of misappropriated funds, penalties can be steep – even 100 percent of the amount owed.
These penalties are enforced even if your business happens to make an accidental mistake in reporting, withholding, or depositing funds. To take it a step further, if the IRS can show that you knowingly and willfully failed to properly submit funds, you may personally face prosecution in federal court. In addition, your executives, bookkeepers, and accountants may also be held responsible.
Your Solution: Professional Payroll Services
When you feel overwhelmed by the information overload inherent to tax documents and payroll compliance, a little bit of help can make a big difference.
Our friend Hank ultimately decided to outsource his payroll duties, freeing himself of the burden of payroll complexities.
Professional payroll services provide an effective tool to help business owners like yourself commit to compliance and avoid significant fines.
Is Your Payroll Information Safe and Secure?
In addition to maintaining payroll compliance, hiring payroll experts will keep your information safe and secure by encrypting, protecting, and backing up transmitted data.
You should always look for services that are both customizable and scalable, so solutions can grow in conjunction with your demands and other changes.
Make Sure You Are Payroll Compliant
Have questions about your payroll compliance?
We offer free consultations to help educate you on any payroll issues you may have and suggest solutions customized to your needs.
Latest posts by Balance Point Team (see all)
- 5 Things That Needlessly Cost Your Nonprofit Time And Money - September 18, 2018
- How One Nonprofit Improved Their Hiring Practices with HCM Technology - September 11, 2018
- 5 Simple Profitability Opportunities CFOs Can Find In Soft Costs - September 4, 2018