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Running a small business allows you to live out the exciting dream of being your own boss. However, this role comes with added responsibility. Your employees rely on you to complete payroll administration in an organized manner so that they receive their money on time. Let these frequently asked questions serve as your starter guide to the process.

FAQ About Payroll Administration

What types of employees do you have?

Employees can be paid per hour or receive an annual, set salary. For hourly employees, you must establish accurate time tracking, which can be done with a traditional time card or on the computer through clocking software. These individuals are subject to the Fair Labor Standards Act governing minimum wage. Salaried employees making more than $23,600 aren’t subject to this legislation.

What does withholding refer to?

payroll administrationEmployers must withhold federal, state, and in some cases, local income taxes. You also have to withhold the employee contribution to Medicare and social security, while contributing the employer portion yourself.

What reporting requirements do you have?

Employers need to adhere to federal, state, and local payroll tax reporting requirements. You must provide either a 1099-MISC form for contractors or a W-2 for employees. 

What if you make a payroll administration error?

It’s important to address any mistakes promptly. For instance, if you accidentally pay an employee as a contractor, you may be liable in the future for back income taxes at the federal, state, and local levels.

 

If you want to save time on your payroll, contact the skilled team at PayrollHR Hawaii in Kilauea. For over 10 years, these professionals have provided Hawaii business owners with quality human resources, reporting, and payroll administration services. They believe in proactive, responsive communication and maintain personal contact with each of their clients to ensure accuracy. Learn more about their virtual bookkeeping online, or call (808) 828-2070 to speak with a specialist about your business’ needs.

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