1. 2016

2. Payroll
The process used by an organization to pay its employees accurately and on time

4. Payroll Challenges Complexity Communication Technology Accuracy
Monitor and implement federal, state, and local tax laws
FPC Testing is based on Federal Law
Communication
Paychecks, paycards, vouchers – must be timely, accurate, and easily understood – must be clear and concise
Technology
Software, equipment, and web-based applications can automate and enhance the process of payroll, timekeeping, and record storage
Accuracy
Required for tax filing, management reports, and paychecks
Payroll Challenges

7. New Hires – Getting Started
We hired someone…
What’s next?
New Hires – Getting Started

8. Worker Status Employees… Independent Contractors…
Need to provide SSN and W-4
Nonexempt ees subject to FLSA standards
Taxes withheld and paid by the employer
Receive a W-2
Independent Contractors…
Need to provide an ITIN and W-9
Taxes paid by themselves
Receive a 1099-MISC
Temporary/Leased Employees
Agency and company have a contractual agreement
Workers are employees of the AGENCY but subject to company policy
AGENCY bears the burden of paying, withholding, reporting, and administering taxes and benefits for these workers
Worker Status

11. The IRS imposes fines and penalties when employees are mistakenly classified as independent contractors. Treat the worker as an employee to avoid non-compliance and penalties and…
Seek public ruling information
Request private ruling from the IRS
(Mis)Classification

12. New Hires – Eligibility and Identity
My new hire is an employee.
What’s the next step?
New Hires – Eligibility and Identity

13. Determine Employment Eligibility
Immigration Reform and Control Act of 1986
I-9 Employment Eligibility Verification
Required to prove identity and right to work
Employers can face stiff penalties for knowingly hiring workers not eligible for employment: from $375 to $16,000, or if repeat offender, criminal charges
Determine Employment Eligibility

14. Obtain and Verify SSN Form W-4
Federal Employee Withholding Allowance Certificate
Employee completes W-4 during hire process
Employer can request SS card to verify SSN
SSNVS Social Security Number Verification System
Obtain and Verify SSN

15. Completing the I-9 Upon Hire Date: Employee completes Section 1
By first day of work
Employer reviews and completes Section 2
Within 3 days of employee’s first day of work
Retention of I-9
3 years from date of hire OR 1 year after termination, whichever is later
Completing the I-9

16. The “W” Forms W4 – Federal Employee Withholding Allowance Certificate
Requested when hired and for life changes
Default is Single with 0 exemptions
Alterations, flat dollar amounts, and percentages are invalid
Exempt status – filed annually, earns less than tax exemption
No need to send to IRS unless notified
Retain for 4 years from last 1040 filing or 1 year from termination

17. W4P - Withholding Certificate for Pension or Annuity Payments
Default is Married with 3 exemptions
Additional amount is allowed

18. W4S - Request for Federal Income Tax Withholding from Sick Pay
Third party wage payment for illness or injury that is non-job related
Minimum withholding is $20/week
Must be adjusted to net at least $10
Many states require tax withholding