New years are for new beginnings. And with a new year just around the corner, now’s the time to get your payroll squared away. When it comes to payroll, experienced employers and those just getting started can learn new tips to make payroll easier than ever. Read on for payroll tips to start your year out right.
5 Payroll tips to kickstart your year
You know the saying, “New year, new you, new payroll process.” (That’s how it goes, right?) Whatever the case is, a new year is the perfect time to make your payroll process better than ever. Check out the following 5 payroll tips to get your process on the right track.
1. Know your tax deadlines
With a new year comes a new batch of tax deadlines you have to remember. It’s easy to lose track of different forms and deadlines if you don’t plan ahead. Remember that most forms are due either annually or quarterly.
Common payroll forms include:
- Form W-2
- Form 1095-B
- Form 940
Missing deadlines can lead to penalties. Check out this chart for common payroll forms and their deadlines.
|January 31||Form W-2Form W-3Form 940Form 944|
|February 28||Form 1094-C|
|March 31||Form 1095-B|
Form 1094-BForm 1095-C
|Every quarter||Form 941|
2. Organize your files
Keeping organized payroll records is a must for any business. Why? Not only will organized records help you fill out quarterly and annual tax forms, they’ll also help you stay compliant with the IRS. The IRS requires that you keep payroll records for certain lengths of time, depending on the type of record.
If you don’t have a filing system already, don’t worry. It’s never too late to get started. Filing cabinets are a tried and true way to organize your payroll records. But there are some drawbacks to think about. Files can easily be misplaced, and they’re susceptible to damage from things like fire and water. Cloud storage helps avoid these potential disasters and lets you access files from anywhere. If you use online payroll software you can store your payroll records in the cloud.
3. Make hiring plans
If you’re planning on hiring new employees in the future, don’t wait until the last minute to prepare.
To prepare for new hires, make sure that you have
- All of your new employee forms on hand
- A new hire onboarding process
Your new hire onboarding process will take your organizational skills to the next level and help employees become valued members of your business.
4. Classify workers properly
It can be difficult to know if a worker is an employee or an independent contractor. But, you must classify them correctly. If you misclassify workers, you may have to deal with IRS penalties, and your workers can miss out on valuable wages and benefits. So, what’s the difference between an independent contractor vs. employee?
There’s ongoing debate about how to classify workers and independent contractors. But there are several factors that can help classify workers correctly:
- How integral the worker’s services are to the employer’s business
- The permanency of the worker’s relationship with the employer
- The amount of money the worker invests in facilities and equipment
- How much control the employer has over the worker’s decisions
- The worker’s opportunity for profit and loss
- The amount of skill, initiative, judgment, and foresight needed for the worker to succeed
- The degree of independent business organization and operation
If you’re still scratching your head, see the Department of Labor for the most up-to-date information on classifying workers.
5. Make sure your basic payroll process works
If a new year teaches us anything, it’s that things change. The payroll process from last year may not cut it next year. If you’ve added more employees or have less time on your hands to manage payroll on your own, you may want to change up your payroll process.
If you haven’t looked into online payroll software, it may be time to see what all the fuss is about. Here are some of the perks of online payroll software:
- Low cost
- Secure cloud storage
- Accessible anywhere and anytime
Are you in the market for payroll software? Try Patriot’s Full Service payroll. You don’t have to sign a long-term contract to get all the perks like easy onboarding, accounting software integration, and guaranteed tax filing accuracy. Don’t wait till next year. Try it for free today!
This article has been updated from its original publication date of January 6, 2016.This is not intended as legal advice; for more information, please click here.