A very important part of managing a construction business is processing the payroll.
While payroll processing may seem simple, it requires a lot of attention – because making mistakes when performing it can be very costly, in the sense that it can attract both state and federal fines or penalties.
In fact, these fines are much heavier during the tax season. For this reason, you need to ensure your payroll procedure is precise and efficient.
Some businesses turn to account professionals to better simplify the process – however, not all businesses can afford this luxury.
So in an effort to make this easier for such businesses, here are some very key areas and aspects of the process that you need to focus or improve on.
Issuing Pay Stubs To Employees
The FLSA (Fair Labor Standards Act) doesn’t require companies to furnish workers’ pay stubs; rather, it governs matters like business payroll documentation. The federal legislation has stringent standards for documentation, but companies are not required to furnish a printed record.
Pay reports aren’t mandated by federal legislation, but the majority of states have chosen to establish state legislation requiring companies to give employees frequent reports concerning their salary and deductions. Broadly speaking, the reports must include these relevant data: worker name, SSN, taxes, payment cycle, and rate of pay.
See the State Labor Office Information website to discover if your jurisdiction has pay report regulations or whether pay stubs can be delivered digitally to workers.
If your state requires the issuance of pay stubs, you need to be very meticulous about the process. Also, you need to be very vigilant to avoid the issuance of a fake pay stub – you will be surprised at how easy it is for scammers to fake this vital document. Ensure that any digitized platform you use is absolutely safe and almost unhackable.
You avoid any problems throughout tax season with frequent audits. You should audit if you see a surge in the number of workers who are worried about their paychecks. In fact, it doesn’t matter if your process is automated or still uses paper timecards; periodic audits minimize mistakes.
For a fact, when automated or computerized payrolls are employed, mistakes are frequently considerably more significant. And such an error might affect your employee’s salary if a calculation or variable input is wrong.
Regular changing fields, like tax positions or increases, need to receive audits frequently. Conducting audits will save you energy and cost by preventing future fines.
A comprehensive audit entails starting at the payroll process’s outset. Always check to confirm that all time and numeric values are accurate.
Observing Tax Regulations
Penalties may be imposed for any miscalculations.
And sadly, these miscalculations are widespread because many aren’t aware of new IRS regulations. Due to these errors, businesses are forced to pay penalties and remedy their problems. So, to avoid these issues, you must accurately register your payroll.
For this reason, understanding the federal and state regulations governing payroll is crucial. Every year, there may be possible modifications to the tax code, so you must keep informed.
Just because you don’t know much about tax legislation doesn’t guarantee your staff will either. You might be subject to legal action if you don’t follow the correct payroll procedures. Workers who don’t receive the required overtime or are paid for the wrong hours will be able to sue.