Payroll compliance isn't glamorous, but getting it wrong can be costly. Fines, penalties, and damaged employee trust are all consequences of non-compliance.
Key Compliance Areas
Tax Withholding
Employers must correctly calculate and withhold federal, state, and local taxes. Rates change, so staying current is essential.
Tax Deposits
Withheld taxes must be deposited according to strict schedules. Late deposits incur penalties.
Tax Filing
Quarterly and annual tax returns have firm deadlines. Filings must reconcile with deposits and W-2s.
Wage and Hour Laws
Minimum wage, overtime, and meal/break requirements vary by location. Classification of exempt vs. non-exempt matters.
New Hire Reporting
New employees must be reported to state agencies within specific timeframes.
Common Compliance Mistakes
- Misclassifying employees as contractors
- Miscalculating overtime
- Missing deposit deadlines
- Failing to update for tax rate changes
- Incomplete or inaccurate W-2s
Staying Compliant
- Use payroll software that updates automatically
- Keep accurate time records
- Document everything
- Conduct regular audits
- Stay informed about regulatory changes