Your HR team’s deeper understanding of payroll policies will help diffuse some of the payroll staff’s pressure when communicating with employees. This eventually improves working relationships and boosts the overall mood inside the office. Learn more about the payroll process and how to efficiently approach this in our how to do payroll guide. For state-specific payroll process information, check out our state directory and click on the state you want to learn more about.

Do Year-end Payroll Tax Reports

1. Whether you provide training through your human resources department or you have a third party train your team, it’s crucial that there is a training process.
2. Whether you’re storing your data online, using payroll software, or outsourcing payroll services, you need to think about your data security.
3. This can be particularly beneficial in today’s remote work environment, where you may be managing payroll for employees spread across different locations.
4. Despite this fact, most payroll advice is geared toward larger organizations, so that information isn’t helpful when you’re looking for ways to make your lean team more efficient.

EMF Media operates like a growth incubator for startups and brand-builders across Europe. Before Deel, they were using five different platforms in order to accommodate the different payment requirements for each contractor. In this article, we explore some of the payroll best practices you can implement in 2024 to improve your team’s payroll functions. One of the ways to avoid these concerns—and avoid the potential turnover or legal trouble that come with them? Employee complaints about incorrect payroll information can result in low morale and a lack of trust in your organization—not to mention potential legal challenges if the issue isn’t resolved. These laws stipulate how to classify workers, the maximum amount of time allowed between paydays, which records to keep (and how), and other requirements.

Automated systems can also be affected by data entry errors like incorrectly recording a new employee’s tax status (married vs single) or entering old pay rates. As the end of the fiscal year approaches, you’ll need to prepare W-2 forms for your employees and 1099s for any contractors. These forms summarize each individual’s earnings and tax deductions for the year and need to be sent out by Jan. 31. Here are 27 of the best payroll tips to keep in mind, broken down into the segments of the payroll process for efficient management. No matter what, your business or company must be compliant with both federal and state laws.

Best Employee Scheduling

How you classify your workers—as either employees or independent contractors—impacts which taxes you need to withhold and pay. This means you need a payroll calendar that specifies which days to run your process, leaving enough time for you to calculate and submit payroll—and for the bank to process transactions. This means that if payday is on a Friday, you can’t run your payroll on Friday morning and expect your employees to receive their paychecks by that afternoon. Payroll software can be extremely affordable, costing from $40 per month plus $10 or less per employee. With all of the time, energy and potential liability involved in payroll, this is well worth the price. This is where you do all of the payroll calculations on your own and then submit any direct deposits or print any checks all by yourself.

Set Up a Robust Payroll Budget

One of the upsides of managing payroll is that almost all of the necessary deadlines are known beforehand. Incorporate this strategic planning into your payroll department’s schedule to avoid payroll mistakes and Internal Revenue Service (IRS) penalties. Keep and maintain your employment, payroll, and tax records for a minimum of four years (though it’s recommended you keep them all for six years, just to play it safe).

Employers need to stay on top of their tax obligations and any changes in state and federal reporting requirements. Changes can occur for various reasons, including business relocation, employee relocation, and hiring remote employees. When this happens, it’s the employer’s responsibility to gather and update the information it needs to compute payroll and taxes accurately. Finally, the best way to create an optimal payroll management system is by regularly collecting feedback from your workforce. Check in with your employees regularly to make sure that they understand your policies and procedures and that they are happy with how everything is running.

Calculating tax withholding amounts, gross and net pay, and additional deductions is no easy task, but it has to get done. How and where you set up notifications depends on your team and the tools you use. Automating reminders in a collaborative tool you already use on a daily basis, such as Slack, is one of the simplest ways what is a bank statement to ensure notifications are received. Or, create a payroll calendar in your team’s shared Google Calendar and invite all required payroll team members to the events throughout the year.

That being said, overreliance on payroll software can bring with it a new set of issues. Simply plugging in the numbers and letting the software chug away can leave you unfamiliar with the financial goings-on of your payroll. They can also make data compilation for potential audits that much more difficult.