Common Payroll Tasks That No Business Owner Should Ever Neglect
It’s a mammoth task to keep a business running. There are few things that can be as arduous. So many things can go wrong, and a lot of them happen when you neglect even the most basic tasks. Business is, well, serious business. And that’s mostly because there’s a lot of money involved.
After all, you cannot live comfortably without money these days.
Now, while there are many things that can go wrong, there are a few things that you simply cannot fail to accomplish, either because it will mean failure for your business, or worse, you may even get in trouble with the law.
So, what are these tasks that you should never neglect to perform?
Classifying An Employee Properly
Contractor labor law abuses happen a lot in the realm of business, which is why this executive order was put into action a few years ago. The status of a member of your workforce (whether it be as a contractor or as an employee) is important because this determines what kinds of benefits that particular worker is going to enjoy.
Misclassifying a worker in order to escape having to pay benefits is a serious crime. And even if you did so unknowingly, the fact remains that you failed to give an employee benefits that they are entitled to. Either way, you’re going to be held in violation of the aforementioned executive order, the penalty for which is the closure of your business.
Paying Your Payroll Taxes
If there’s another thing that you should never neglect to do, it’s paying your payroll taxes. About 40% of all small businesses receive a fine of $850 annually for failure to pay their payroll taxes on time. Payroll providers should help you get things sorted. And if you do have overseas contractors working for you, you’d be surprised at how easy and secure international money transfers actually are.
Calculating Proper Net Pay
This is once again connected to employee benefits (contractors do not enjoy this privilege). Now, it’s one thing to pay your payroll taxes and another thing to pay your employee what is due. Employee bonuses are a prime example of an expense that you should treat as net pay, not as something that can be deducted because of taxes. If your employee earns a bonus of $150, you as a business are obliged to pay the entire $150 regardless of the taxes you have to pay on top of that amount.
Adhering to the Minimum Pay Period
The frequency at which you pay your employees also holds some weight. While it’s true that making frequent payments to your employees will have a significant impact on your operations as well as your cash flow, it is mandated by law that you pay your employees (depending on the state you’re in) weekly, bi-weekly, semi-monthly, or monthly. You can pay more frequently, but you cannot pay less times than what is required by the law.