5 of the Biggest Payroll Mistakes that Small Business Owners Make
Have you ever read something and found yourself shaking your head in agreement through the entire piece? Well, when I saw a slide presentation from Accounting Today about the payroll errors commonly made by small business owners, I had to agree. I personally have been given these reasons for why some of my clients make the decision to outsource their payroll to The Payroll Department! These are costly mistakes when the IRS or other governmental agency gets involved – I know lots of people who will agree with that. Don’t be caught out! (more…)
Generally, your employee’s tips are not taxable unless they make more than $20 per calendar month. If they do make over $20 in tips per month, you’re responsible for withholding income and FICA (Social Security and Medicare) taxes on the employee’s reported tips (all tips, including the initial $20) – even though you don’t have control over the amount of tips your employee receives.
As with many business decisions, a good place to start is by looking at the applicable state and federal law. In this case, there are not a lot of rules that must be followed. Federal and state laws do require that employees be paid on a regular basis. That means that you need to decide how often employees will be paid and then stick to it. A business is not allowed to deviate from its usual pattern to accommodate a seasonal slump or an unexpected expense. In addition, some states have laws setting a minimum frequency at which workers must be paid.