Running a business takes a lot of time and energy. For small businesses, doing your own billing and payroll might be the way to go, but what about a growing business? When business is booming, you don’t want to spend time keeping your books up to date, processing payroll, entering tax write -offs, or searching for missing tax information. You want to focus on the future of your business, rather than dealing with paperwork. This is why business owners are hiring payroll experts to take care of their financial needs.
Tag: calculate payroll
Payroll is one of the most important aspects of business– it builds financial stability among employees and boosts team morale. Many businesses, especially small businesses, tend to take payroll into their own hands and avoid outsourcing payroll. Managers and business owners spend hours calculating everything themselves, often times juggling other roles in the business at the same time. Taking care of your own payroll works when your business is just starting out, but this should be avoided when the business grows.
Once business is booming, it’s wise to bring in a payroll expert to make sure that you save yourself time, headaches, and money. This will allow you to focus on the growth of the business rather than worrying about whether or not your employees are going to get paid on time. Additionally, without a payroll expert, there’s a chance that you can make a mistake. Mistakes can lead your business to legal penalties, so getting some help might not be a bad idea.
Lunchtime can be a tricky thing to track. Some employees forget to clock out, adding minutes to their paychecks daily, while others forget to clock back into work once they return. This leads to inaccurate timestamps and, even worse, inaccurate payroll. You will end up either overpaying employees or underpaying employees, which can lead to issues down the line. In order to keep timestamps more accurate, some employers choose to implement automatic lunch deductions for hourly employees. This ensures that employees get lunch breaks deducted, no matter the circumstance. This is great for employers who want to avoid overpaying employees, but many people still have questions about the legality of lunch deductions.
A lot of employees ask “Is rounding payroll hours even legal?”, and the answer is yes. The Fair Labor Standards Act (FLSA) states that you must pay your employees for all hours worked. According to DOL, however, employers are allowed to round hours. Under the FLSA, you are allowed to round employee’s time in 15 minute increments or to the nearest quarter hour. When rounding time you just have to ensure that you are not violating FLSA regulations for minimum wage and overtime pay.
For the longest time, why anyone would use rounding in payroll calculations was beyond me. Since rounding is meant to even out in the end, what could possibly be the point? I don’t like unanswered questions hanging around so I decided to do some digging. I still don’t think rounding is a brilliant idea but at least I understand why it’s used. Essentially, rounding in the morning is meant to benefit the occasional late employee while rounding in the evening can benefit the employer. I’ll explain how this works.
Have you ever run payroll and found that your cost is much higher than expected? In some industries, like dental offices, for example, payroll costs should be pretty constant. Your same five employees come to work every day and work their set shift. They take off when they’re sick or on vacation and your time-off policy compensates them for it. They don’t need to stay late or come in early most of the time – the office is open on a pretty set schedule.
Business owners are experts at running their business. But they probably are not trained in payroll and they probably haven’t studied federal and state wage and hour laws. This leaves room for quite a bit of error.
Messing up payroll is serious business. Payroll is a business’ largest expense and getting it wrong could mean facing an even larger expense. I’ll bring five of the most common payroll errors to the attention of these busy people so they don’t wind up in trouble for it later.