Payroll errors lead to strained relationships, budget overages and costly penalties. Production companies can avoid these headaches by ensuring they meet IRS deadlines and follow proper work hour calculation practices.
This includes ensuring that all timecards are approved and that each cast and crew member receives their payments on time. The best way to ensure this is with payroll software designed for confidence in compliance. Contact Florida PEO for professional help.
Payroll taxes are the taxes that employees and employers both pay on wages, tips, and salaries. These taxes fund Social Security and Medicare, local infrastructure, and other federal programs. In addition to paying payroll taxes, employees have the option of claiming income tax deductions on their paychecks. The rates and rules for payroll taxes vary by state, city, and town.
The most significant part of payroll taxes is Social Security, which receives 73 percent of the $539 billion collected in 1993. The other 20 percent is split between unemployment insurance, railroad retirement, and other retirements. Local payroll taxes also exist, but they are typically much smaller in amount.
When comparing payroll and income taxes, one must remember that payroll taxes are regressive and are automatically deducted from an employee’s paycheck. As a result, they tend to affect lower-income households more than higher-income households.
In contrast, income taxes are progressive and are based on an individual’s total income. This makes them a more fair way to tax workers.
Understanding payroll taxes is essential for anyone running a business or handling their own payroll. Small businesses can enlist the help of a bookkeeper or payroll software to ensure that they’re correctly withholding and depositing these funds.
While calculating payroll taxes isn’t a complicated process, it can be time-consuming and tedious. This is especially true for small businesses with a high volume of transactions or complex tax rates. For these reasons, many businesses choose to outsource their payroll processing services.
It’s important for employers to understand the various payroll taxes that they are responsible for collecting and remitting to the government. These include Social Security and Medicare, federal income tax withholding, federal employment taxes, and state unemployment taxes. Employers must also pay their share of FICA taxes, which is generally 7.65%. All of these taxes must be remitted to the IRS through either FEDTAX II or Electronic Federal Tax Payment System (EFTPS) and reported annually on Form W-2. For more information on payroll taxes, see IRS Publication 15, Employer’s Tax Guide. It’s also a good idea to check with local authorities to make sure that you’re aware of any special taxes that might apply in your area.
Timecard Approval
Time card approval is an essential step in the payroll process. It ensures that the correct hours are logged for each employee and that any errors are corrected before checks are issued. It also helps protect the company from any legal disputes related to payroll processing. There are many tools available for time tracking, payroll management, and time card approval. Choose one that meets the needs of your business and makes the process easy for everyone involved.
When an employee logs their work hours for a pay period, they submit the completed time card to their supervisor for review and approval. The supervisor reviews the time card to ensure it reflects the work hours actually performed by the employee and that it is in compliance with company policies and labor laws. The supervisor can approve or reject the time card and then forward it to payroll for processing.
If a time card is rejected, it must be reworked and approved by the supervisor before it can be used for payroll processing. The supervisor may also need to review the time card in more detail and make any necessary corrections or adjustments. Having clear processes in place for reviewing and approving time cards can reduce the need for back-and-forth communications with employees and minimize delays in processing payrolls.
Once the time card has been revised and approved, it is used to calculate the employee’s gross earnings. Taxes, benefits premiums, garnishments, and authorized deductions and withholdings are then deducted from the gross wages to find the net pay. Finally, any overtime pay or bonuses are figured in to find the total earned.
Using an online time management and payroll system can help you automate some steps in the process and streamline the entire workflow. This will not only save you a lot of time, but it will also eliminate the need for manual rework and ensure the accuracy of the information in your payroll records. There are a variety of options available, from basic tools like Easy Clocking to more robust solutions like Homebase that offer features like employee scheduling and team communication.
Direct Deposit
When employees choose to receive their wages through direct deposit, the funds are transferred directly into a bank account instead of being paid by check. This payment method reduces expenses for both companies and employees by eliminating the costs associated with producing, printing, mailing, and delivering paychecks. It also creates digital logs that can help organizations organize financial records accurately and efficiently, improving accounting processes and reducing the risk of errors or missed entries.
To set up direct deposit, you need to enter each employee’s banking information into the payroll system. You can do this manually for each employee or upload the data in bulk using a NACHA file, which organizes bank accounts and personal details into one document. After you complete this step, you need to inform your employees of the new deposit schedule and let them know how long it will take for their direct deposit to arrive in their accounts.
Once the system receives the bank account and personal information, it assigns each check a unique number during the Pay Confirmation process. The paycheck SQR reports (PAY003, PAY003CN, and DDP003) and the check and advice print processing formats sort the checks by these numbers and by each employee’s pay group and pay period. They also use the bank transit and account numbers entered on the Payroll Options pages, the employee’s home address from the Employee Addresses table, and the company-specific MICR font for printing in BI Publisher.
In addition to saving your finance team time, direct deposit provides several other benefits for your organization and its employees. For example, it eliminates the need for employees to cash or deposit their paychecks at work, avoiding the potential for lost or stolen checks and reducing employee absenteeism. It also makes it easier for employees to budget their incomes, since they can automatically allocate a portion of their paycheck to savings or other goals.
Another benefit of direct deposit is that it reduces the amount of paper your organization uses, lowering your carbon footprint and reliance on fossil fuels. Ultimately, it gives your business a competitive advantage by encouraging employees to embrace sustainability and promoting an ecofriendly workplace culture.
