Payroll Solutions

 Facts that provide evidence of the degree of control and independence fall into three categories:

1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
2. Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
3. Type of relationship: Are there written contracts or employee-type benefits (e.g., pension plan, insurance, vacation pay, etc.)? Will the relationship continue, and is the work performed a key aspect of the business?

For all the details visit the irs.gov

 Exempt employees are exempt from FLSA laws, while nonexempt employees are not. Generally, employees classified as exempt are paid an annual salary and not entitled to overtime and may not need to be paid minimum wage, while nonexempt employees are paid hourly and are entitled to overtime pay and minimum wage.

State law plays a role in setting the difference between exempt and nonexempt employees. The type of work an employee performs, as well as their industry, plays a role in the distinction. 

A job title and job description can help clarify, too. That’s because paying overtime rates to a professional employee like an executive whose duties usually involve working more than 40 hours per week—often far more than 40 hours per week—could prove close to impossible for even the most cash-flush businesses.

Read the complete article by Gusto

The Department of Labor states:

“For covered, nonexempt employees, the Fair Labor Standards Act (FLSA) requires overtime pay to be at least one and one-half times an employee's regular pay rate after 40 hours of work in a workweek.

• Some exceptions apply under special circumstances to police and firefighters and to employees of hospitals and nursing homes. Additionally, workplaces that are governed by collective bargaining agreements may be exempt from the FLSA and will have separate overtime standards that they will need to follow.

Some states have their own overtime laws. In cases where an employee is subject to both the state and federal overtime laws, the employee is entitled to overtime according to the higher standard (i.e., the standard that will provide the higher overtime pay).

• Extra pay for working weekends or nights is a matter of agreement between the employer and the employee (or the employee's representative).”

 Ohio

• Overtime occurs after weekly: 40 hours
• Overtime calculation Weekly: 1.5 x RRP (regular rate of pay) for all hours over 40 in a week.
• Explanation: Weekly: Refer to FLSA definition.

3 things make up a pay schedule:

1. Pay frequency – how often employees get paid
2. Pay date – the day on which employees are paid
3. Pay period – the time frame during which the employee worked

Pay frequency dictates how often you need to run payroll. While biweekly and semi-monthly are the most common, your client’s choice will depend on their states and what suits them and their employees best.  

• Weekly – 52 payrolls per year
• Biweekly (every 2 weeks) – 26 payrolls per year
• Semi-monthly (twice per month) – 24 payrolls per year
• Monthly – 12 payrolls per year

Check out the Department of Labor’s State payday requirements to find the state pay period and pay schedule laws applicable to you.

 The FLSA requires all nonexempt employees—that is, all hourly and salaried staff eligible for overtime—to track their time. This ensures that overtime is calculated and paid correctly.  

 For payroll to be accurate, regular and overtime hours must be tracked. If you have PTO policies, these hours also need to be tracked so employees can be paid for the PTO hours they use.  

 When an employee doesn’t work out, it’s a tough experience for everyone involved — especially when that person has to leave involuntarily. Even though it’s not exactly a warm and fuzzy event, termination is sometimes the best (and kindest) thing to do to make sure your company and the employee can move forward. Hiring is all about finding a match, and when the two pieces don’t line up, change can be the best remedy.

So when is it okay to fire someone? And what steps should you follow to make sure the termination doesn’t subject you to liability or create waves? In this article, we’ll lay it all out for you.

Read the complete article by Gusto

  State regulations about dismissal payrolls vary, but usually cover when you must issue the last paycheck, and how the employee must be paid—whether by check or direct deposit.     State regulations also cover whether an employer is responsible for paying out any unused PTO. Gusto calculates this and makes it easy to add to the final paycheck. Employee Terminations? 

 Gross pay is the amount of money your employees receive before any taxes and deductions are taken out. For example, when you tell an employee, “I’ll pay you $50,000 a year,” it means you will pay them $50,000 in gross wages.

Net pay is the amount of money your employees take home after all deductions have been taken out. This is the money they actually get on payday.  

Just remember: gross pay − deductions and taxes = net pay. 

Read the complete article by Gusto

  Even though payroll taxes are paid by both employers and employees, there’s one major difference. Payroll taxes paid by employees affect employees’ net pay, but payroll taxes paid by employers don’t. 

Read the complete article by Gusto

 FICA stands for the Federal Insurance Contributions Act, and it’s a federal tax that employers and employees pay. FICA tax includes two taxes: Medicare tax and Social Security tax. The 2024 tax rates for employers are 6.2% for Social Security and 1.45% for Medicare. 

Read the complete article by Gusto

 FUTA stands for the Federal Unemployment Tax Act, and it’s one of the taxes employers have to pay as part of payroll taxes.    FUTA taxes fund federal unemployment insurance, which is a government program that provides temporary financial support through unemployment benefits to eligible employees after they’ve been terminated due to no fault of their own. An eligible worker will typically receive FUTA wages each week from the unemployment insurance fund until that worker is once again employed or has exhausted the covered time period. 

Read the complete article by Gusto

Find detailed information about employer taxes.

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 W-2 (for employees)

What it is: Employee’s Wage and Tax Statement

When: Annually 

Due by: January 31st for the prior year 

With who: Employees, the Social Security Administration, and some states (when required)   

What it does: Reports employees’ annual compensation and payroll taxes withheld. It tallies up all the earnings, deductions, and withholdings for each employee every calendar year.

1099-NEC (for contractors)

What it is: Nonemployee Compensation statement

When: Annually 

Due by: January 31st for the prior year 

With who: Contractors and the IRS 

What it does: Reports any compensation made to nonemployees, aka contractors. Some states may also require a copy.

940 (for employers)

What it is: Employer’s Annual Federal Unemployment (FUTA) Tax Return

When: Annually

Due by: January 31st for the prior year   

With who: IRS  

What it does: Compares the FUTA tax liability with FUTA tax payments to determine whether deposits were timely and if there’s a balance due.  

941 (for employers)

What it is: Employer’s Quarterly Federal Tax Return

When: Quarterly

Due by: April 30th, July 31st, October 31st, and January 31st for the fourth quarter of the previous calendar year

With who: IRS   

What it does: Compares federal payroll taxes owed with taxes paid during the quarter to determine whether the payments were timely and if there’s a balance due. Taxes include: employees’ income taxes, Social Security, and Medicare, along with the employer portion of Social Security and Medicare tax. 

944 (for employers)

What it is: Employer’s Annual Federal Tax Return 

When: Annually

Due by: January 31st for the prior year  

With who: IRS

What it does: Compares federal payroll taxes owed with taxes paid during the year to determine whether the payments were timely and if there’s a balance due. Taxes include: employees’ income taxes, Social Security, and Medicare, along with the employer portion of Social Security and Medicare tax. 

Ohio Department of Taxation - look up school districts income tax