Payroll rules ensure that every employee gets a fair income for the time and efforts he/she invests at work. In addition, it also ensures that no business has to release unwanted payouts to any employee under any circumstances. But these rules can change depending on the market and employment conditions. So, this requires you to keep a track of rules and changes that may impact your business.
- Social Security Taxes: As an employer, you are responsible for withholding social security tax and making contributions on the behalf of employees. Here, understanding how the tax percentage, withholding, and employer’s contributions change with changing base pay is essential.
- State Laws and Contributions: Businesses also need to be compliant with the SUTA regulations. Since employers are responsible for paying the SUTA tax, tracking any change in the legislation is essential. There can be a modification to the wage base and the limit for paying the tax.
- Compliance with the Withholding Rules of Federal Income Tax: Employers withhold a certain amount from taxes from the wages they pay to employees. The federal tax brackets can change with time, so it is essential to stay updated with the alterations. This ensures that the business stays compliant with the federal tax rules as well.
- Minimum Wages: There can be a difference in the minimum wage as per the state and federal rules. Thus, it is essential to understand the difference and which one applies to a particular business or employee.
And there’s a lot on the list, keeping a track of which might get difficult for a business owner. However, hiring accounting payroll services from Sydney can ensure your compliance with all the rules, all the time.
A business that processes transactions on time gains value in terms of reliability and reputation. Besides those sale/purchase matters, there’s another transaction section that bears equal importance. Payroll management is crucial as the right approach can keep both employees and employers happy while a wrong step might disturb everything at hand. And apart from the number of salaries and hikes, a payroll schedule is something you should plan wisely.
Certain regulations require you to affix a payroll schedule for a particular type of employee. Besides, you can choose from four common options to define the right payout times.
- Weekly: Often the most disliked by business owners, it requires you to release paychecks every week, especially if you have hourly employees. While it can make the staff happy but businesses have to incur extra processing costs.
- Bi-weekly: Another option for hourly workers, bi-weekly is relatively cost-effective than the first one. With 52 weeks, you have to send out 26 paychecks in a calendar year. However, there won’t be fixed payout dates and some months might see three paychecks.
- Semi-monthly: This option sounds similar to the bi-weekly one. But there’s a core difference. In a semi-monthly schedule, paychecks are distributed twice every month on fixed dates. This makes it 24 paychecks every year.
- Monthly: Often suitable for contract-based staff, the monthly schedule involves 12 paychecks in a year, once every month on a fixed date.
Choosing the Right Payroll Schedule
Bi-weekly and semi-monthly might seem to be the most obvious choices for hourly and salaried employees respectively. But the final choice depends on your business and financial structure. Hiring accounting payroll services from Sydney can help you manage finances, accounting, and payroll in the best way possible.