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Posts published in “Payroll”

Rounding Time Punches is Bad News

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Time rounding. A practice that once had a purpose, should go the way of the dinosaurs. Back in the caveman days, when an employee stuck their timecard in a dinosaur’s mouth to punch in and out, payroll administrators needed a quick way to total hours. The fastest way to do that was to round punches; Looking at a shift and seeing 9:06 a.m. to 5:03 p.m. or 8:55 a.m. to 5:07 p.m. and calling them both as eight-hour days. With modern technology, that is no longer the case. Automated timekeeping systems are able to calculate punches to the minute without…

Implementing a 401(k) Plan is Now a Win-Win. Free Money for Business Owners and their Employees.

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They say timing is everything, and if there were ever a time to implement a 401(k) plan, the time is now. We first wrote about the Secure Act 2.0, in this post back in February 2023, a short time after it was signed into law by President Biden. One of the best parts of this act is that the government wants to give business owners money to start a plan AND even better, they want to give you money to give to your employees. This is accomplished in three different tax credits to small business owners, as covered below. Let’s…

Important notice: Do you have a level-funded health plan for your employees?

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Selecting a health insurance plan for your employees is harder than ever, with the exponentially rising costs and endless number of plans. Not only are there many different carriers to choose from, but there are also three different types of plans available:   Fully-insured health plan: You may even call this the traditional insurance plan, where the employer pays a monthly premium and the insurance company pays all claims.   Self-funded health plan:  This is where the insurance company is paid an administrative fee and the employer acts as the insurer, paying the claims as they are incurred. This plan is typically…

State Minimum Wage Increases 2024

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While the Federal minimum wage remains at $7.25 per hour for the past 15 years, 28 states and many cities, counties and locals have set increases effective January 1st, 2024 with a few announcing a change during 2024.  Many states continue their path to $15.00 per hour with a number of states exceeding that rate and places in Washington state that have a minimum wage approaching $20 per hour.  A list of each state/local, along with the new hourly rate is listed below. Any state that does not have a minimum wage change scheduled is not listed. All rates are…

Handy Guide to the 2023 Form W-2

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Over the next few weeks, as your employees start to receive their 2023 W-2 form, they will likely have questions as to what all those numbers mean.  For example, it is not uncommon for a salaried employee who earns $50,000 per year question why their Box 1 Wages only reflects $45,000.  Did they get underpaid? Probably not. If the employee contributes to a pension plan (aka 401(k)) or has pre-tax insurance deductions, then those amounts reduces the “taxable” wage, which is what appears in Box 1. Some employees may also wonder why their Federal Income Tax withheld is much less…

WOTC – A Little Known Tax Credit with Big Potential

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Unlike the Employee Retention Tax Credit (ERC) that came about as the result of COVID-19 and its effect on businesses, the Workforce Opportunity Tax Credit (WOTC) has been around since 1996. It only took ERC about two years to gain popularity, but almost three decades later, the WOTC is still mostly unknown. So what exactly is the WOTC and how can it benefit your business? I am glad you asked. It is a federal tax credit ranging from $2,400 to $9,600 per hire, available to employers who hire workers from a ‘targeted group.’ These are workers who may otherwise face…

Can Employers Mandate Direct Deposit?

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According to Payroll.org (formerly the American Payroll Association,) 93% of employees they questioned use direct deposit. My belief is that they only surveyed their members, payroll professionals. I doubt they surveyed real America and got feedback from the fast food worker, agricultural workers or the mechanic down the street. Not that payroll professionals aren’t real America, but you know what I mean. Based on what I find in practice, direct deposit is less than a 60% adoption rate. Maybe even much less than 50% because I am not looking at the small businesses that run their own payrolls in-house on…

State Spotlight: Guam

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Everything you need to know about Guam's state income withholding tax, reciprocity agreements and other helpful information and links.