Managing payroll needs for your small business is a much more complex and time-consuming process than you may realize. It’s easy to miss details that could cause you trouble with the IRS later. Here are a few of the most common payroll mistakes that small business owners make.
- Improperly classifying employees. Designating someone working for you as an employee vs. a contractor isn’t a personal decision. There are requirements and guidelines for what qualifies as each type of worker, and incorrectly classifying an employee could require you to pay additional taxes later. Outsourcing your payroll needs to a professional can help you avoid this mistake.
- Not paying the correct amounts. There are certain instances where an employee should be paid a different amount than what their typical hourly wage is. Overtime pay is a chief example of this. A business is legally required to pay nonexempt employees 1.5 times their hourly wage when they work over 40 hours in a given workweek. Professional payroll services will make sure this overtime is accounted for and paid correctly.
- Ignoring payroll taxes. It’s hard to remember all the different types of taxes small businesses have to pay, so it’s understandable if you have forgotten about payroll taxes. However, these will need to be paid. If you want to avoid paying fines, ensure your payroll taxes are paid by working with payroll services.
Here at Midlands Accounting Services, LLC, we’ll help you avoid the trouble that can come with late, incorrect, or neglected payroll-related tasks. Call us today and leave your payroll needs to us.