Let’s talk about something that might not be the most exciting part of running your own business but is definitely one of the most crucial: payroll. Yep, we’re diving into the world of paychecks, taxes, and all that fun stuff.

Now, we get it – payroll can be a bit of a headache sometimes. But here’s the thing: making mistakes with your payroll can lead to some serious consequences. From unhappy employees to hefty fines from the IRS, nobody wants to deal with that mess. So, let’s chat about some of the most common payroll blunders and, more importantly, how you can steer clear of them.

Mistake #1: Misclassifying Employees

Ever heard of the term “employee” versus “independent contractor”? It’s not just semantics – misclassifying your workers can land you in hot water. Make sure you understand the difference and classify your team members correctly to avoid legal headaches down the road.

Mistake #2: Miscalculating Overtime

Overtime pay can get a bit tricky, especially with varying rates and exceptions. If an employee works more than 40 hours in a week, they’re entitled to overtime pay. The proposed overtime rule may go into effect in 2024. Salaried employees who makes less than $55,068 annually will now be required to receive overtime pay. Just make sure you’re crunching those numbers correctly to keep everyone happy.

Mistake #3: Missing Tax Deadlines

Taxes – nobody’s favorite topic, but they’re kind of a big deal. Missing tax deadlines can result in penalties and interest charges, and nobody wants to deal with that mess. So, mark those dates on your calendar, set reminders, do whatever it takes to ensure you’re filing on time, every time.

Mistake #4: Forgetting to Account for Benefits and Deductions

Health insurance, retirement contributions, garnishments – there’s a lot to consider when it comes to employee benefits and deductions. Make sure you’re accounting for these properly in your payroll calculations to avoid discrepancies and unhappy employees.

Mistake #5: Not Keeping Accurate Records

Recordkeeping might not be the most glamorous part of running a business, but it’s absolutely essential, especially when it comes to payroll. Keep detailed records of all payroll-related transactions, from employee hours to tax filings, to ensure accuracy and compliance.

So, there you have it – a rundown of some common payroll mistakes and how to sidestep them. Remember, payroll might not be the most exciting part of running your business, but getting it right is crucial for keeping your employees happy and your business on track. 

Feeling overwhelmed by all this payroll talk? Don’t worry – that’s where we come in. At The Reliant Group, Inc., we specialize in small business accounting, payroll, and tax preparation services. Let us handle the numbers so you can focus on what you do best – growing your business. Reach out to us today to see how we can help!