Tag Archives: payroll

Tips for Choosing a Payroll Service

Tips for Choosing a Payroll ServiceWhen business owners talk about the excitement of running their company, the joy of doing payroll almost never comes up.

Payroll is meticulous, labor intensive, and riddled with the chance to make costly mistakes.

That’s why more and more owners are outsourcing the task. In addition to buying the increased expertise in an atmosphere of complex regulations and tax situations, they are paying for that burden to be lifted from their shoulders.

Having decided to use a provider, the next step is choosing which provider to use. There are a lot of providers and culling the list is not a simple task.

First, check with your circle of advisers. If your company has a financial officer, regular legal counsel or a regular tax provider, they may have some helpful insight. Then expand to business owners in your network. See who loves the provider they’re using or who has a horror story.

Finally, you can go online and narrow your search through comments and consumer reports about the firms you are considering. Once you’ve whittled the candidates to a manageable number, it’s time to start asking some specific questions.

First, how much you can afford to pay for a service? Costs vary widely and, like automobiles, there are a lot of additional options that can increase the sticker price. Will they bill you monthly or by the pay period?

Second, figure out what services you want to outsource. Make your list and then compare it against the services being offered to find your best fit.

Third, check into support and security. When things go wrong, how quickly will your provider step up and make things right? When are they available? Good customer service should be one of their primary concerns. Also, because many payroll companies are online, what is their security record? Have there been breaches? What are their solutions? Is there a backup plan in case of internet outages?

Fourth, how long have they been in business? How many clients to do they have? Do they handle other companies in your line? Do they handle payroll for your blend of full-time, part-time and contract employees?

And finally, does the company have the resources to meet a growing payroll as your business expands?

Once you’ve made your decision, every payday will be a reminder of the work you’ve put in.

Additional resources:

IRS list of services that have passed the Assurance Testing System

IRS employer tax guide

Final Rule on Overtime Regulations Effective Dec. 1, 2016

Overtime clock rulesOn May 18, 2016, President Obama and Secretary of Labor Perez announced the publication of the Department of Labor’s final rule updating the overtime regulations, which will automatically extend overtime pay protections to over 4 million workers within the first year of implementation. This long-awaited update will result in a meaningful boost to many workers’ wallets, and will go a long way toward realizing President Obama’s commitment to ensuring every worker is compensated fairly for their hard work.

Here’s what you need to know.

Key Provisions of the Final Rule for Overtime

The Final Rule focuses primarily on updating the salary and compensation levels needed for executive, administrative and professional workers to be exempt. Specifically, the Final Rule:

  • Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);
  • Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and
  • establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.

Additionally, the Final Rule amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.

The effective date of the final rule is December 1, 2016. The initial increases to the standard salary level (from $455 to $913 per week) and HCE total annual compensation requirement (from $100,000 to $134,004 per year) will be effective on that date. Future automatic updates to those thresholds will occur every three years, beginning on January 1, 2020.

Need to know more? Get in touch with us. We’ll help you determine how your business and bookkeeping practices need to adapt to the new rules.