Everyone loves payday, but what about payroll processing day? That’s another story. Reconciling employee hours, updating W-4 withholdings, and navigating federal and state taxes can be a time consuming, error-prone process. Annually, U.S. businesses spend up to 80 hours (or two work weeks) on figuring out payroll taxes alone.
There’s a better way. By leveraging both payroll technology and best practice, HR and payroll professionals can dramatically cut down the time spent making payday a reality. Follow these four tips to to achieve “instant payroll.”
1. Take an “All-in-One” Approach to Payroll Tech
At most companies, HR departments manage more than just talent acquisition or performance reviews. Payroll and benefits administration often falls under their purview as well. If your role is all-in-one, why shouldn’t your technology be? If you haven’t already, consider evaluating fully integrated platforms over disparate solutions.
When employee compensation, marital status, allowances, and elections all exist within the same system as payroll, you don’t need to waste time formatting import files or worse yet, manually entering data into payroll. When your system is self-service, that benefit is magnified—employees can update their personal or payment information themselves, so you don’t have to track them down on deadline day.
Time savings aside, it’s also significantly less expensive to use an integrated HR, payroll, and benefits system. To learn more about the benefits of the all-in-one approach, read this overview from TechnologyAdvice.
2. Keep a Calendar
Keeping track of paydates, processing days, and IRS deadlines is no small feat. All of this information should be kept in a place that you and your team can easily reference. Whether you opt to use a digital calendar, traditional hard-copy planner, or even a team whiteboard, having all of these dates in one place makes it easier to plan ahead. Also be mindful of bank holidays, as those can often shift around your processing deadlines.
To get you started, below are some of the critical filing deadlines you’ll need to be mindful of. This list is accurate as of August, 2017:
January 31 - Last day to distribute W-2s and 1099-MISC forms to employees
January 31 - Form 941 due (Employer’s Quarterly Federal Tax Return)
February 15 - Last day to request a new Form W-4 from exempt employees
February 28 - Paper Form 1094-C and 1095-C are due
March 2 - Last day to distribute 1095-C to employees
March 31 - Deadline to submit electronic Form 1094-C and 1095-C
April 18 - Tax Day (filing deadline for personal returns)
April 30 - Form 941 due (Employer’s Quarterly Federal Tax Return)
July 31 - Form 941 due (Employer’s Quarterly Federal Tax Return)
October 31 - Form 941 due (Employer’s Quarterly Federal Tax Return)
Those are just some of the important dates you’ll need to be mindful of. Luckily for you, many of these, in addition to recurring processing deadlines and paydays, are likely already tracked by your payroll provider.
3. Invest in Time Tracking
Getting hourly or nonexempt workers across the payroll finish line has never been easy. Wrangling timesheets and reminding managers to approve hours before the payroll deadline is no small feat. If you’re handling your timesheets the old fashioned way, with punch cards or in spreadsheets, you’re well aware of this.
You shouldn’t have to work overtime trying to calculate hourly pay. Automated time tracking, when it syncs with your HRIS and payroll system, ensures that nonexempt workers get paid accurately and on time with minimal effort. Most solutions also have built-in reminders for payroll administrators, employees, and approvers when a deadline is approaching or action is needed. Additionally, you’ll be able to easily report on employee hours, identify trends, and catch runaway overtime before it hits your company’s bottom line. Try that with your old punch cards.
Need further convincing? With the number of annual wage-and-hour lawsuits increasing by 330 percent, implementing time tracking software might just keep you on the right side of the law, too.
4. Capitalize on the Slow Days
While they’re always busy, payroll and tax professionals’ workloads can vary greatly from quarter to quarter. The end and beginning of the year are particular challenges, with W-2s, 1099s, and the Form 941 all due for filing. When “crunch time” is finally in the rear view mirror, the temptation to gear into autopilot is real. Don’t do it.
Rolling up your sleeves to take care of housekeeping items during slow periods can go a long way in achieving “instant” payroll. During these lulls (Q2 is a great example), take the time to audit employee personal information, confirm state tax rates, and log imputed income. If you know of any employees who have gone through a significant life event, confirm whether they’d like to complete a new W-4. If you already work with a payroll service provider, some of these tasks will already be handled for you. Never leave it to doubt—develop a good rapport with your payroll vendor and don’t shy away from asking even basic questions.
We’ve put together a checklist of simple items you can take care of to ensure the rest of your year’s payroll runs smoothly. You can read it here.
Instant payroll doesn’t have to sound like an oxymoron. There are a number of ways you can streamline your processes today and take the hassle out of payroll processing.
Need a head start in your search? Namely processes over $7 billion in payroll annually for over 125,000 employees nationwide. To learn how our all-in-one technology and time tracking can make running payroll easier than ever, schedule a free demo today.