With the new year comes new payroll laws, and it’s past time for you to ensure your company’s payroll settings are up to date. Tax rates and other policies often change on Jan. 1, so the beginning of the year can be a treacherous time for employers that don’t stay on top of payroll laws.
If you run your own payroll software, you will probably have to manually change some of the settings to make sure they conform with any new laws. There isn’t a setting that will update them automatically; you’ll have to do it yourself.
Even if you have a partner you outsource payroll to, it’s a good idea to educate yourself on payroll laws and how they change so you know what’s going on. You’ll be able to answer questions if necessary and provide information to employees. If you don’t have a payroll partner and oversee these changes yourself, then it’s doubly important to be educated and get regular updates on laws so you’re fully compliant.
This is especially important if you have employees in multiple states, as payroll laws vary by state. Different states have different requirements for when paychecks are cut, the rules for tracking paid time off, even whether an employer has to issue a live check or may do a direct deposit. There’s a lot to follow.
There weren’t any huge changes for payroll for 2015, but some of the things you may want to check include:
The business mileage rate. The IRS changed this rate to 57.5 cents per mile up from 56 cents in 2014. Make sure this is changed on any payroll or reimbursement formulas you use. You don’t want to be underpaying throughout the year and then have to correct it when you discover your mistake.
Social Security limit. Most payroll systems will update Social Security caps, but it doesn’t hurt to check to make sure yours is current. The OASDI limit is now $118,500.
The Affordable Care Act. Payroll laws connect pay and other employee benefits, so it’s important to follow the latest health care laws that apply to your business. Make sure that deductions for benefits are coming out correctly.
You’re also probably going through your company’s W-2s as well this time of year. Getting those correct is so important, since employees face fees and penalties if they file their taxes incorrectly. Check your PTO statements as well if time rolls over for employees at the end of the calendar year.
Education is key for staying on top of changes in payroll laws. The most important reason to pay attention to these changes is to ensure that paychecks and taxes are correct for your employees. You don’t want to lose their trust by getting their paychecks wrong and having to correct it later. Staying up to date on payroll laws will help ensure you don’t break that trust.
We stay on top of changes in payroll laws and help keep our clients compliant. Contact us, if you’d like help handling your company’s payroll.
HR Solutions is a human resources outsourcing firm based in Baton Rouge, Louisiana. We eliminate human resources headaches for businesses with 10 to 1,000 employees by handling their payroll, employee benefits, regulatory compliance and other staffing needs. Contact us to learn how we can streamline your company’s human resources function to save money and reduce risk.