By Heather Raper, Vice President, HCM Operations
Pop the champagne! It’s not New Year’s Eve yet, but the beginning of a new quarter is the second-best thing. If you haven’t thought about what your new quarter resolutions are, don’t fret. We have some best practices for payroll processes that are easier than going to the gym and will help keep your payroll accurate and mess free.
- 1. Keep Up with Your Third-Party Sick Payments
The end of the year is a busy time for any business. The last thing you want is unnecessary fees and amended returns. To avoid the mess, keep up with entering Third Party Sick Payments into the HCM payroll system on a monthly or quarterly basis. This can save you and your employees the necessity of a W-2C.
- 2. Don’t Lose Track of Quarterly 401(k) and 401(k) Match Amounts
Many organizations wait until the end of the year to audit 401(k) deferrals and matches, resulting in last-minute updates and even W-2Cs. Balancing these codes throughout the year will ensure an effortless year-end process.
- 3. Be Careful with Visa Statuses and Tax Exemptions
No one wants to pay taxes they don’t have to. When processing payroll, it’s a bad idea to manually zero out Social Security, Medicare or local taxes in an employee’s paycheck. If you see someone who is having taxes withheld who should not be, there may be a setup issue and you can contact the service team for assistance in in setting up the employee properly as well as correcting the check and pay history.
- 4. Verify Employee Social Security Numbers
It’s important to make sure that every employee’s social security number is correct. Mistakes can cause delays in the production of W-2s, and result in costly W-2Cs. The IRS offers E-Verify, which allows you to validate SSN’s against employee names, dates of birth and gender. This will ensure you have correct W-2s and also 1095-C forms. In 2017, names must match exactly as they appear on the social security file or the 1095-C submission will fail.
- 5. Stay on Track with Imputed Income and Fringe Benefits
Fringe benefits and imputed income items can also be entered throughout the year. You don’t have to wait until the last minute to record items such as personal use of company vehicles, Group Term Life, etc. Entering these amount on a quarterly basis can reduce your to-do list during the busiest time of the year.
One thing we learned in school was that procrastinating and cramming only gets you so far. While C’s may get degrees, saving everything for the last minute in payroll increases the risk for error. Maintain your data throughout the year and save yourself the headache of cleaning up a payroll mess.