Most business owners dream of growing their company, but hiring new employees comes with additional responsibilities. Unless you have a professional payroll service, the increasing complexity of calculating wages and maintaining compliance with state and federal tax laws make it easy to commit mistakes, some of which have serious consequences. If you’re a small business owner, here are four common payroll mishaps you should be aware of. 

4 Common Payroll Mistakes to Avoid

1. Failing to Pay Payroll Taxes

Both state and federal agencies require every business to pay payroll taxes on a monthly or bi-weekly basis. Failing to pay these taxes can result in asset seizures, liens on your property, and significant late filing fees.

2. Misclassifying Employees

While employers are required to collect payroll taxes on behalf of employees and provide them with certain benefits, independent contractors are generally exempt from many of these regulations. Failing to follow IRS guidelines when classifying employees could make you liable for all of their back payroll taxes.

3. Improperly Calculating Overtime Wages

Both state and federal laws require employers to pay most employees overtime wages for hours worked over a certain limit. Calculating these wages and the taxes due on overtime can be extremely complex, which is one reason many business owners choose to use a professional payroll service.

4. Missing Deadlines

Missing a deadline or falling behind in your check preparation may result in late paychecks, which will likely impact morale and could cause talented employees to leave. Missing an IRS deadline can also result in hundreds or even thousands of dollars in additional fees, which most small businesses can’t afford.

Having a professional payroll service handle the details can prevent common mistakes, save money, and allow you to focus on running your business. JJR & Associates LLC provides a wide range of critical services to businesses throughout the Greater Atlanta area, from long-term tax planning to daily bookkeeping and payroll services. Visit their website to see how they can help you reach your goals, or call (404) 437-7748 to schedule an appointment today. For more tax and financial tips, follow the firm on Twitter.