Don’t forget ‐ October is the month for preparing third-quarter 2018 payroll reports.
As you begin gathering the information you’ll send to federal, state and local governments, check your compliance in these four key areas:
Federal and state laws spell out your responsibilities for meeting minimum wage and overtime pay, as well as what records you need to keep, like hours worked, pay periods and pay dates.
And if you have employees and independent contractors, make sure to know the difference so you can ensure your workers are classified correctly.
Income tax withholding.
As an employer, you’re responsible for withholding the correct amount of income tax from your employees’ wages and remitting the withholding on time as part of your payroll tax deposits. Maintain current Forms W-4 on file for each employee to be sure you’re withholding the correct amount of tax.
This tax is a set percentage of gross wages. The base rate is 7.65 percent for 2018 for both employees and employers.
When you pay an employee more than $200,000 in a calendar year, you’ll also withhold an additional Medicare tax of 0.9 percent from your employee’s wages. Keep in mind, there is no employer match for the additional Medicare tax.
Federal and state unemployment taxes are not withheld from employee wages. These taxes are paid solely by you, the employer. Make sure you’re calculating your liability using the correct rate. (A credit reduction applies to some states.)
Call your Abacus Payroll Specialist or Alloy Silverstein accountant you have questions about your payroll taxes. We’re here to help you stay up to date.