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3 Pillars For Success With Payroll, Benefits & Taxes

It’s a tough landscape out for prospective business owners, because there’s so much to keep tabs on! You’ve got paperwork, regulations, standard protocol, and above all else — compliance. In other words, if you’re not following the rules, your business goes under even before it takes off. Consider this the baptism by fire for a soon-to-be business owner, because if you’re going to be in charge of a company, better take charge and hit the pillars hard with your authority of thoroughness and completion. There are three of those pillars, starting off with….

Managing Payroll

There’s a reason why this particular pillar is first and foremost. This would be how your future workforce will get paid. If they don’t get paid, you essentially don’t have an operating business, obviously. So consider these legal responsibilities very carefully:

  • Observe the Legal Minimum Wage — It’s mandated, basically. Chances are if you’re not paying an employee at least the absolute minimum wage in your state, that could result in major penalties toward your company. It’s basically violation of federal law.
  • Always Consider Overtime Carefully — Many owners overlook this, for obvious reasons. How often would overtime occur anyway? But in case employees are expected to work a little overtime, make sure you’re paying 1 ½ times the hourly wage or calculated wage. Cover your backs with that.
  • Provide All Pay Information — One would think that it’s only necessary to write up that paycheck. The employee cares about the actual pay. By law, though, you’re required to itemize everything: gross pay, deductions, withholding, net pay, etc. etc.. Don’t ignore that. You never know when an employee might catch you for that.
  • Taxes, Taxes, Taxes — That’s one obvious thing many employees keep in mind. So observe the deadlines. You absolutely need to provide that yearly statement of earnings, also known as the W-2, within the deadline of the last day of next year’s January. Don’t forget it.
  • They Deserve the Last Paycheck — I get it. They quit, or you fired them; so they therefore from a certain perspective don’t even deserve whatever hours they still have on payroll that hasn’t been paid, yet. Legally, though, and in fairness, you have to pay them that last paycheck within 30 days of termination. It’s required.

You don’t want to ignore any of this. It could result in a nasty workplace claim against you. Keep tabs on your legal requirements to avoid that.

Offering Benefits

This might come as a surprise to you, for obvious reasons, because as many of us may know, we’re not required to provide health benefits or anything like that. However, there are some benefits that we’re absolutely mandated to offer and some of those benefits we originally thought held no such mandate in fact do (provided the business satisfies certain requirements).

As of January 1 of 2014, because of the Affordable Care Act, small businesses with 50 or more full-time employees will actually have to by law offer health insurance, no ifs, ands or buts. Furthermore, if you have 50 or more employees, you also must provide Family and Medical Leave whenever necessary, which is up to 12 weeks of unpaid leave without fear of losing a job under these possible situations –

  • Medical Recovery of a Surgery or Accident
  • Medical Care of an Immediate Family Member
  • Care of an Eligible Employee’s Child

Additionally, unemployment, workers compensation and disability insurance are must-haves, legally. Ensure that they’re in place even before starting up operations.

Get Your Taxes Squared Away

So I fibbed. This has to be the single most important pillar of the three. While a disgruntled employee can get you in trouble for not handling payroll correctly or not providing the mandated benefits, automatically the federal government can slap your hand for not filing your taxes correctly and expediently. You’ve got a lot to focus on:

  • Federal Income
  • Social Security
  • Medicare
  • Federal Unemployment

That’s just to name a few. Make sure you’ve got an accountant. Because taxes can get very messy. You need that financial janitor to constantly and yearly clean all of it up for you, so your business doesn’t get penalized.

Above All Else, Consider These Resources

Thankfully, there’s a lot of help to ensure you’ve covered these three pillars successfully. Do the research. Make your business truly successful.

  • http://sba.gov — This site is the be-all and end-all of successful small business. Peruse to your heart’s content, and be sure to check out their handy 10-step checklist.
  • http://www.dol.gov/compliance/#.UKNG_-Oe-_A — This is a helpful guide to inform you of several important aspects of business, such as wage garnishments, termination issues and contractor classification.
  • http://www.irs.gov/pub/irs-pdf/p15.pdf — If you ever needed to know all you needed to know about your taxes as an employer, read this. It will guide you.
  • http://www.zenpayroll.com/ — Payroll can be a pain, but not with this streamlined guide for making sure paychecks are issued out correctly with respect to state and federal payroll taxes and even help to auutomatically submit those filings immediately.
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Matt is the CEO at UpCounsel, the easiest way for businesses to get amazing legal services. You can follow more business advice on twitter @upcounsel.

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