New Year, New Payroll
Now that we are nearly one month into 2022, it is important to take a look at your business and assess your solutions and strategies to consider what improvements you can make for the new year. An important part of your small business operations to take a look at is payroll. Are you as efficient and compliant as possible?
A great place to start is to evaluate your step-by-step payroll process. Is your process complex and time-consuming? Has a promotion from 2021 come to an end? Are your concerns being heard and issues being addressed in a timely manner? It may be time to switch to a new payroll provider. Thirty-five percent of small business owners say payroll is the operation of their business that they are most concerned about, so be sure to analyze your process to help determine what is right for you.
After you evaluate your payroll process and decide to look for a new processor, it is time to find a payroll platform that suits your business. As you look for a new provider, keep in mind your business and your specific needs. Some payroll providers, such as Abacus Payroll, have dedicated payroll specialists that get to know your business and personally respond to inquiries, while other providers have a widespread team of customer service representatives that you are randomly assigned when you call a 24/7 1-800 phone number. Large payroll processers may have prepackaged bundles to offer, while others may offer a more a la carte approach to personalize the monthly services you are paying for. Only you know your business best and what will be most appropriate for your needs.
No matter which payroll provider you choose, the bottom line is your employees need to be paid each pay day and your payroll taxes need to be filed in a timely manner. These tips will help prepare you to be aware of important payroll factors that may affect your business.
Payroll taxes must be calculated correctly and paid on-time.
You must withhold the correct amount of payroll taxes from employee paychecks and pay them as required. You do not need to withhold the following federal taxes from employee’s paychecks: Income Tax, Social Security, and Medicare (state taxes vary, depending on the state). See our Payroll FAQs for more payroll intricacies.
Workers’ compensation insurance is a required purchase in most states.
Most states require you to purchase workers’ comp to cover potential expenses from on-the-job injuries by employees. Ask your Abacus Payroll provider a for a Pay-As-You-Go quote today.
Tax forms must be filed by their deadlines.
Employers must report the taxes they have withheld and paid to the IRS and other tax agencies. Some reports must also show total income paid out, in particular the year-end W-2 forms that are required to be mailed out by January 31.
Payroll records must be kept on file for three to four years.
You are responsible for several recordkeeping requirements for payroll. It is suggested to keep all payroll records for at least four years. This includes paycheck stubs, year-end tax forms, new hire tax forms, time sheets, etc.
Minimum wage is required.
Make sure that you are aware of the minimum wage requirements for your business. The Federal Minimum Wage for 2022 is $7.25 per hour. For most employers in New Jersey, the minimum wage is $13 per hour. See our Payroll Tax Rates section for more wage and tax information.
Does new year, new payroll mean a new provider for you and your business this year? January is a great time to switch a minimal amount of data to a new provider. Submit a quote request or contact the Abacus Payroll Team at 856-667-6225 and start off 2022 ahead of the game!