Payroll – ADP, the Leader in the Field

In this second of a series of articles on payroll, we're going to cover one of the largest payroll processing companies, as well as one of the oldest, in our history. ADP pretty much invented payroll processing. Today there are many competitors but ADP still ranks at the top of the list. We're going to…

In this second of a series of articles on payroll, we're going to cover one of the largest payroll processing companies, as well as one of the oldest, in our history.

ADP pretty much invented payroll processing. Today there are many competitors but ADP still ranks at the top of the list. We're going to look at some of the services they offer and how they work.

First of all it needs to be pointed out that ADP is an outsourcing company. In other words, instead of having your payroll processed in house it is sent to ADP off site and they process it for you. So, just how does this work?

Actually, ADP offers two distinct solutions.

The first one is outsourcing your payroll. The company supplies ADP with all their employee records and from those records ADP processes your payroll. Either ADP sends the checks to you, or they make them available for you to get, through your electronic electronic printing program, which they provide. However, if you should choose to have ADP do it all for you they will provide the payroll system, the network connections, data management center, and complete IT support. All you need to do is distribute the checks after they are delivered.

But ADP does not stop there. For companies that want to handle their own payroll but do not want to be responsible for all the technology that goes with it, ADP offers what they call ADP's Payforce. This is a strategic solution that offers a combination of outsourcing benefits and an internal Internet solution. This is a very low cost solution that many companies use.

Basically the way Payforce works is as follows. All the payroll records are kept in ADP's internal database systems. The company accesses these systems through a simple Internet connection. Through this connection, they can access pay records, processing and a variety of reports. This service is available anytime from anywhere. The design of the system itself has been made simple enough to be intuitive so that minimal training is needed for persons in the Human Resources department to use. The system makes payroll data entry easy and fast. The system also includes payroll review, custom forms, effective dating, an employee transfer agent and multi level reporting.

ADP will also guarantee data integrity with this system. While no computer system is 100%, ADP has had a long history of reliability and millions of companies world wide feel confident in their service.

Also of great importance is ADP keeping up with the latest payroll regulations on a daily basis. A company is guaranteed that their payroll will be processed accurately and according to federal and state regulations.

The third solution ADP offers is your own Windows based billing processing system, where you process your payroll in house, and are in complete control.

Whatever solution a company chooses, ADP has built its reputation of many years of outstanding service and a company can be assured that this service will continue for many years to come.

Employee Management Using Right Type of Payroll Software

There are many different types of payroll software that you can buy to help you manage the payroll of your company. These payroll software packages are even further broken down into the specifics of your company. For instance, if you have a company that is a part of the entertainment industry you'll want to have…

There are many different types of payroll software that you can buy to help you manage the payroll of your company. These payroll software packages are even further broken down into the specifics of your company. For instance, if you have a company that is a part of the entertainment industry you'll want to have a payroll system that keeps track of the information that is unique to your industry. You'll need a payroll software that will keep track of union information, meal penalties, and credits. The software that you use will calculate time sheets according to industry standards, including hours worked, any advances, or other adjustments. From these timesheets you'll be able to see exactly how much each employee is paid. From there it's up to you to pay your employees.

If you have a large company, or you just do not feel confident, you can hire a payroll service to calculate all your payroll information for you. This may cost you a bit more than if you do the work yourself using payroll software, even if your company is large enough that you may find that the hours spent inputting payroll information simply takes you too long to do yourself. Both options are viable for you and your company and will give you the accurate payroll results that you need to correctly pay your employees and to keep the precise records that you need to keep.

One thing to keep in mind when you're using payroll software: if you're going to have the software installed on more than one computer you're going to have to make sure that you have more than one license for the software. This may cost you a bit more in the initial startups costs but in the long run could be more beneficial if you want to be able to enter payroll information on more than one computer.

Getting Your Kid Off The Payroll

Do you have a recent college graduate who is unemployed, or if they are employed, dislikes and maybe even hates their first job? Well, do not feel bad, because by all estimations, at least half of all recent graduations are either unemployed or underemployed (working a job that does not use either their education or…

Do you have a recent college graduate who is unemployed, or if they are employed, dislikes and maybe even hates their first job? Well, do not feel bad, because by all estimations, at least half of all recent graduations are either unemployed or underemployed (working a job that does not use either their education or their ambition). It's difficult deciding who should feel worse, our kids or us.

The children of baby boomers (our kids) are going to college in record numbers. There are more applicants to American universities today than at any time in our country's history. There are also record numbers of foreign students flocking to American universities taking up a limited number of seats. Our college track and soccer teams have very talented South Americans, our swim teams include world class Australians and the University of Colorado's entire ski team is European. As a result of this growing imbalance of supply and demand, the price for each college seat continues to rise.

When you and I went to college, the monthly cost was equal to a car payment. Today it is a mortgage! I have three kids all heading to private universities. The average cost of one year of private college is approaching $ 40,000. State schools are quickly approaching $ 20,000. Today, it's not just a diploma, it's about the “campus experience” with multi-million dollar student centers, laptop computers, cell phones, cars on campus, semesters studying abroad, and semester breaks in the Bahamas. In my next life, I want to come back as one of my kids!

As our children near graduation (in four or more years), we hope that they get what we paid for – a good job with a good future, because we want our kids to be happy and successful. But, what do you get from a college for that $ 80K – $ 160K education. Well, you get the right to put “_______ university” on the rear window of your car and the privilege to brag about your child at parties. You get a child who learned a lot about social life, living on their own (financed by you), and a child who hopefully graduates with a degree in their major major in four years.

Now what do not you get for your college tuition? You do not get a child with a job, and you do not get any long-term career strategy or guidance. You have to do that yourself. That's because they do not teach Career Management in college. They do not teach you about life, how to decide what job is best for you and how to get the job that is best for you. They do not teach you how to perform in your job, how to deal with peers or a difficult boss, or how to ask for a new job assignment. They especially do not teach you how to lead or how to handle the adjustment to the culture of a new organization. They just do not do any of this stuff. Why? Because they do not have to. It is a seller's market and they are the seller.

As the cost of college goes even higher, you will hear about creative job help programs being supported by universities. However, colleges have only so much money for career programs, and it will never be enough to adequately support every student. Let's face it, after graduation, you are on your own. So, you and your child have to take control of the situation.

If you are one of the millions, yes millions, of baby boomers who has an underemployed and unhappy college graduate, you need not be ashamed. But, you do need to take action. Not the kind of action you may have taken when your child was 12 years old, and you did it for them. You need to help them help themselves. If you want to get your kid off the payroll and on the way to personal satisfaction and happiness, you must do the following 3 things:

1. Let them know you understand their challenge. Hey, despite being a little bit spoiled, your child is undergoing one of the most significant transitions of their life. Without judging them, start having discussions (listening much more than speaking) about the difficulty of leaving the college life and the support community and 4 year predictable life they left behind.

2. Help them help themselves. They must find their own goals and motivation. Encourage them to articulate and gradually commit to short and long term goals that really motivate them. Encourage them to visualize what they want their future to look like. Then ask them to decide how committed they are to achieving their goals.

3. Help them develop a plan of action towards achieving their own independence. Help them develop a plan of action aimed at achieving professional satisfaction and personal independence. There is a host of responsibilities that they must accept, but building and gradually executing an action plan is the only way to start.

These 3 steps are meant to be executed over time, but with conviction by both parent and child. You do not want them being dependent on you forever, and believe me they do not want to be, either. So work together but start work today.

Successful Payroll Management

Any business owner that has employees, knows that payroll can be a complicated task to manage. Moreover, it can be downright frustrating if you are not sure exactly where you should begin. Yet, successful payroll management does not have to be a chore. Further, you can find significant advice relating to successful payroll management online.…

Any business owner that has employees, knows that payroll can be a complicated task to manage. Moreover, it can be downright frustrating if you are not sure exactly where you should begin. Yet, successful payroll management does not have to be a chore. Further, you can find significant advice relating to successful payroll management online.

Did you know that there are associations that can guide you in the proper direction in terms of successful payroll management? For example, the American Payroll Association provides a website that addresses myriad issues relating to the payroll process. They also provide information to individuals interested in a career in payroll management. Individuals visiting the site can learn about the basics of payroll.

The Internet has made learning the fundamentals of payroll a far simpler process than ever before. With the advent of the web, information is easily accessible to business owners everywhere. Now, you do not have to spend hours on the telephone ordering publications only to find that you ordered a publication that is not at all helpful in addressing your payroll questions. Instead, you can now easily access such publications from your office or home and scan them for the information you require, which may be direct depositing, federal and state taxes, federal and state garnishment complaints, hourly wage laws, and much more. So, there is no waiting for the mail to arrive, only to find yourself completely frustrated and lost, rather the information you seek is often just a click away.

By visiting associations that deal with teaching successful payroll management, you can get yourself involved in various seminars. By attaching seminars, you can learn about significant issues pertinent to successful payroll management. For instance, you can learn about garnishments and how they apply to the payroll process, tax compliments associated with payroll, and even learn about professional payroll services and how they work. Finally, there are even audio seminars available if you are unable to attend in person. If you prefer, you can easily find listings of the latest conferences that are planned relating to payroll issues.

On the other hand, if you are seeking pay resources, the web will provide you with a wealth of information. You can find accounting software that will make payroll management easier for you, reliable accountants who can help you manage your business payroll, tax attorneys that can assist you with all of the complicated tax laws in your state, and information on how to conduct payroll processes electronically. A simple search engine search will have you mastering your payroll management in no time whatever.

Microsoft Great Plains Payroll Module Customization Scenarios

It is now common when large corporation selects mid-market ERP or so-called standard functionality MRP solution as its corporate accounting system. Microsoft Business Solutions Great Plains is very good candidate. As all MBS ERPs it has MS SQL Server 2000/2005 database platform and allows you to deploy customizable and altered solution, serving large corporation HR…

It is now common when large corporation selects mid-market ERP or so-called standard functionality MRP solution as its corporate accounting system. Microsoft Business Solutions Great Plains is very good candidate. As all MBS ERPs it has MS SQL Server 2000/2005 database platform and allows you to deploy customizable and altered solution, serving large corporation HR department. If you use US / Canadian Payroll module as paycheck solution for internal employees – you probably do not need custom logic. In this small article we'll show you the way of tailor integrated solution for nation-wide placement agency.

o The Market. There is huge placement market in healthcare – registered / certified nurses, also we see growing placement market in other industries, especially looking for temporary work: wholesale & retail, manufacturing, agriculture, etc.

o Paychecks. Temps may work for one or multiple of your regional clients and they may decide to walk in to one of your regional offices to request immediate paycheck for their weekly work. Each office should be capable to issue paycheck immediately and the problem is to process and post it in Great Plains. Definitely you can use eConnect to create work checks, but eConnect does not allow you to post transactions, this is why you need custom solution. If you are large company – you may have a need to issue several thousand checks per day – automatic posting is the must.

o Additional complications. US and Canadian payroll regulations have specific payroll deductions. If the paycheck amount is small – there is no sense to withhold the deduction (it is designed for regular employees, who get their paychecks twice per month). So, these deductions should be asserted in the custom logic and then paid when specific criteria are met.

o Customization Tools. In the described case we suggest to use SQL stored procedures for calculating checks and Dexterity process server to post checks (creating SQL stored procs for posting would be virtual rewriting 40% of Great Plains Dexterity based billing module). And of course eConnect should be used to pull employee / temp master record: discounts, state tax, local taxes, address, etc.

o Targeted Clientele. We certainly understand that placement & recruiting midsize and small market is underserved. We have to tell you here that proposed solution is for large corporate clients only. It is expensive to tailor it for the unique business (we know that each placement business is unique).

Currently we are confident in MS Great Plains ability to automate the following industries: Aerospace & Defense, Chemicals, Oil & Gas, Advertising & Publishing, Distribution & Logistics, Beverages, Supply Chain Management (SCM), Pharmaceutical, Nonprofit, Wholesale / Retail, Manufacturing / Assembling, International Business / Multinational Corporation, Government.

You can always have us help you, give us a call: 1-630-961-5918 or 1-866-528-0577, help@albaspectrum.com

Payroll Taxes

If you have employees, you are liable for payment taxes. This is a term that lumps all the different forms of employment taxes into one category known as “payroll tax”. In reality, payroll taxes encompass Federal and state income tax withholding, social security and Medicare taxes (also known as FICA), Federal unemployment tax (FUTA), as…

If you have employees, you are liable for payment taxes. This is a term that lumps all the different forms of employment taxes into one category known as “payroll tax”. In reality, payroll taxes encompass Federal and state income tax withholding, social security and Medicare taxes (also known as FICA), Federal unemployment tax (FUTA), as well as any state and local unemployment taxes assessed. Payroll taxes are deducted each pay period from an employees gross pay. The remaining money distributed to the employee is what is known as “net pay”.

Along with any taxes deducted from an employee's wages, there is a social security and Medicare liability incurred by the employer. You must match the social security and Medicare amounts withheld on each employee. This is the employer paid contribution. Until recently, most employers reported and paid payroll taxes quarterly. With the advent of the EFTPS, or Electronic Federal Tax Deposit System, taxes are now paid on a monthly basis by all employers. The payroll taxes may also be paid via a tax coupon that is taken to your bank and presented with the monies to cover the payroll taxes due.

Every quarter, a Form 941 (or 943 for Agricultural employees) must be filed with the IRS. The amounts reported on the 941 should reconcile to the amounts turned in each month via the tax coupon or the EFTPS. At the end of the tax year, a Form 940 or information return must also be filed.

If you are a small business with employees, or you plan to begin operating a business with employees, you need to understand your tax responsibilities as an employer. The IRS provides links to all relevant forms and publications via their internet site at http://www.IRS.gov http://www.IRS.gov>. Here you will find definitions and terms associated with employees from the sunset of hiring, to termination. W-4's, W-2's, I-9's, all the employment taxes you will be responsible for reporting, all the rates associated with those taxes.

The IRS also provides you with information relating to recordkeeping, employment eligibility verification, benefit and retirement plans, and even the definition to be used in order to determine if someone is an employee. There is a generous benefit to be had by investing the time and resources necessary to understand and comply with all the federal, state, and local regulations concerned with employees and payroll taxes. However, you should frequently seek the advice of a qualified tax professional, your accountant.

Payroll – More Than Just Paying Money

Payroll. If you ever worked at a company, large or small, the best day of the week or month, depending on company policy, was payday. For some, it's the only reason they even go to work but payday is more than just digging into a box and pulling out a fistful of money to give…

Payroll. If you ever worked at a company, large or small, the best day of the week or month, depending on company policy, was payday. For some, it's the only reason they even go to work but payday is more than just digging into a box and pulling out a fistful of money to give to the employees. Payroll management is actually a fairly complex process that can easily be screwed up at any one of various points along the way.

Payroll actually starts with the employee signing up with the company. At this time the employee fills out a W4 statement that reflects to the company one of possibly several options. For starters, it indicates how many contributions the employee wishes to claim in calculating his paycheck. The more discounts the less money that's taken out. Some employees claim zero discounts in order to have more money taken out now, so that later on when tax time comes either or either pay less tax or maybe even get a refund.

Employees, at the time of employment, may also indicate if they want to have money taken out for stock options, IRAs, pension plans or a number of other items. Some of these may be mandatory, some optional.

Then of course there are other discounts that have to be credited for in person's paycheck. There is federal tax, state tax, disability tax, social security tax, and depending on where you live, local and other miscellaneous taxes. Some professions, like teachers, have union dues that have to be paid. The total number of deductions will of course vary from state to state and company to company.

After all this is done, the employee is of course given a pay rate, which can either be an hourly, weekly or a yearly rate, which would then be broken down into pay periods. Some companies pay weekly, some bimonthly and some monthly.

Finally, after all the charges are accounted for, when the pay period arrives the employees need to be paid. Again, this is not done by reaching into a box and pulling out a wad of cash. With all the complicated calculations required to compute a person's pay, this usually becomes too much for any one person at a company to handle, unless it's a very small company. For this there are payroll processing services.

In the United States, probably the most popular payroll processing service is ADP, which has been in business for over 50 years. They were the first and are still the best. Basically what they do, and we'll go into more detail in a future article on ADP themselves, is take all the company information on each employee, do the necessary calculations and then cut a paycheck for each employee or if they choose, have the money deposited directly into their bank accounts. This assures the most accurate processing of each person's paycheck.

In the next article in this series we'll discuss ADP specifically, since they are the largest and the best, and cover the services they offer in detail.

Microsoft Great Plains – Payroll & HR Inexpensive Solution? Not Any More

Microsoft Great Plains is a major Microsoft Business Solutions accounting package for the US market. You should probably expect some issues when you have software development company to be bought by big player – in this case Great Plains Software was bought by Microsoft (Bill Gates was a friend to Doug Burgum – owner and…

Microsoft Great Plains is a major Microsoft Business Solutions accounting package for the US market. You should probably expect some issues when you have software development company to be bought by big player – in this case Great Plains Software was bought by Microsoft (Bill Gates was a friend to Doug Burgum – owner and leader of Great Plains Software – Great Plains Dynamics / eEnterprise). We certainly have some influence level in Microsoft Business Solutions, but what happened is out of our decision level and this is really sad story.

OK. Let's go to the story itself. Imagine – you are small company who serves to your clients as payroll / Human Resources outsourcer. Old-days Great Plains Dynamics on Ctree or Pervasive SQL / Btrieve was excellent and inexpensive solution. You could have all your clients need installed on your home computer somewhere in Southern States, enjoying the sun and the niceties of California for k $ 2 per year with Great Plains software list price of around k $ 10 with unlimited number of Payroll / HR employees

Now – you have sudden hurricane – over Florida – somebody who is in charge in Microsoft – but really without clear understanding on what is in stake – this person needs to retune the cheap Great Plains version. Good – now you have Small Business Manager with restriction on employee count, then you have so-called Great Plains Standard which is available on MSDE and MS SQL Server 2000 – it caps you at 500 employees and … – as a result of this decision – you can not conduct your business with Microsoft Business Solutions any more.

We have multiple examples of our customers who had to switch to Accpac, Adapta Soft and other cheap vendors of Payroll HR versions without limitation on the number of employees. We do certainly respect the right of Microsoft to compete with Oracle, SAP and PeopleSoft – but what is going on is probably non-planned and side effect of the solution which was made too soon. Of course the need to finish the contract with Pervasive software was a good idea – but cutting your small loyal customers – we actually doubt this

Happy implementation! if you want us to do the job – give us a call!

Be Nice to Your Payroll Department

Ok, so next to the taxman, your company payroll department might well be the most criticized people on the planet. Of course, when your pay is accurate and on time then you love the salary people with a passion but when things go wrong it is a completely different matter. Rightly or not the payroll…

Ok, so next to the taxman, your company payroll department might well be the most criticized people on the planet. Of course, when your pay is accurate and on time then you love the salary people with a passion but when things go wrong it is a completely different matter. Rightly or not the payroll professionals come in for an awful lot of abuse if your pay is not perfect.

I have had experience of working in a payroll department, in fact, I WAS the payroll department so I am going to put forward a few ways that you can help your payroll department perform their job more efficiently and process all the money that you are due correctly. Yes, it is large up to you I am afraid!

Your payroll department is only able to work with the information that you give it so it is important that you provide them with everything they need. I do not mean handing in your expense forms the day after they are due either. It is your responsibility to send your payroll department everything that you are claiming for in good time for them to process it.

If you live in a country where you have a tax code that may be open to change due to your circumstances, your payroll department can not be expected to be psychic, even if you wish they were. For example, in England, if you have not submitted your previous tax form when you start with a new company then the payroll department is obligated to set your tax deduction rate at the basic rate. This is a lot higher than your tax code is likely to be but it is the only course of action that they can take. So, when your pay is processed you may find that you have a lot more tax deducted [http://www.vipayroll.com/payroll/payroll_tax_chart.html] than you should have. This is down to you and means that you have to wait until the end of the tax year to claim back your overpayment form the local tax office, not your payroll department.

Of course, not every country works the same way but they do have similar policies when it comes to claiming work related expenses. If you do not send in your claims in a timely and accurate manner your payroll department is not going to be able to reimburse you for the amount you have paid out.

Payroll departments are usually extremely busy around pay day because of the volume of last minute submissions for expenses and other additions to your pay. They are only human and mistakes are not always avoided due to the high pressure they are under.

At the end of the day, your payroll department IS only human. You need to do your part to help them perform their job [http://www.vipayroll.com/payroll/payroll_jobs.html] efficiently. The larger the company that you work for, the more that liasing with your payroll department becomes a necessity. Next time you look at the amount of pay that you have received and start to complain about it being less than it should be, think long and hard about whether it is the payroll department's fault or yours. Chances are, it is the latter!

Payroll Software, Payroll Services, Online Payroll – What’s the Difference? Which is Best?

Selecting the right payroll solution is an important decision for all business owners. The wrong payroll solution can be expensive not only in terms of money, but in productivity, which translates back to morale, which translates back to money. When selecting billing solutions, carefully consider your resources. Here are brief descriptions of each type, and…

Selecting the right payroll solution is an important decision for all business owners. The wrong payroll solution can be expensive not only in terms of money, but in productivity, which translates back to morale, which translates back to money. When selecting billing solutions, carefully consider your resources. Here are brief descriptions of each type, and the resources you need to implement them:

Payroll Software – Payroll within Accounting Software

When using payroll software, or when running payroll within your accounting software, your company runs payroll “in-house.” Your company is responsible for all upgrades to the software, including tax table and tax rate changes. This option provides a high level of control, which some clients prefer. Generating checks, withholding taxes, tax return filings, and payroll tax payments are the main duties that must be carried out in a timely manner by someone within the business. Electronic services, such as direct deposit, may or may not be available through the software.

To run payroll in this manner, you need a person who is not only familiar with payroll laws, but also familiar with the accounting side of payment. Payroll is confusing, even daunting, so do not expect a $ 9 an hour clerk to set up and run your payroll.

Speaking of payroll set-up: be certain your software provides excellent customer support during the set-up process. Depending on the number of checks run in the current year, payroll set-up can be challenging, to put it mildly.

If you have many checks to print, consider buying a printer specifically for this purpose (it can also be used to print accounts payable checks). Contact your check vendor for more information about ordering the correct type of check for your printer.

In terms of the monthly expense, this option will probably run between the next two options.

Payroll Services

When using a payroll service, your company outsources payroll duties entirely. You are in contact with the payroll service as often as you run payroll (for example, every week or every two weeks), telling the service how many hours each employee worked, informing the service of new or terminated employees, or asking any other questions . The payroll service will then generate and deliver checks; withhold taxes; make tax payments; file tax returns; and compute, distribute, and file year-end forms. Electronic services are available. Human resource (HR) services are sometimes available. Usually you can find a payroll service in close proximity to your business.

This is a very simple option. A phone call to the payroll service takes care of most payroll duties. This is a good option for those who do not want to take care of pay duties themselves, and who do have other resources (such as time or personel) to run payroll in some other manner. Even the set-up should be trouble free, since the payroll service will handle it.

This option is the most expensive of the three options.

Online Payroll – Internet Payroll

Online payroll, also known as Internet payroll, can be customized to suit the client's needs. For clients who wish the ease of a payroll service, wanting only to make a phone call each payroll period with the service taking care of everything else, online payroll can provide that. For clients who prefer the control that payroll software brings, wanting to run checks and take care of other duties “in-house,” online payroll can provide that as well. Even something in between these two options is possible. The level of service varies from one provider to another. Even within a single provider there can be varying levels of service, depending on what clients need. Same with the set-up; the online service can handle it all, or the client can handle it all or or there can be a mix of both parties taking care of it.

Clients are not responsible for maintaining tax tables or updating software when using an online payroll provider. Electronic services, such as direct deposit, electronic tax payments, and electronic tax returns, are available. It is not necessary to find an online payroll provider in close proximity to your business, since you can both access the same data through the Internet.

This is a good solution for those who are already comfortable with the concept of online banking. Payroll data is stored on secure servers, and transmitted with a high degree of encryption, so it is very safe.

Regardless of how this solution is customized, this option is most likely the least expensive of the three options.

Final Thoughts

Take some time to shop around and compare payment solutions. You will be better able to make the right choice if you carefully consider the time, money, and personel you can devote to payroll tasks.

Payroll Tax Penalties, When the IRS Sends a Letter

“Payroll Taxes are Due, with Penalties and Interest” At least that is what the letter from the IRS says. First thing, do not panic. Quoting Daniel J. Pilla's study for the Cato Institute “About 40 percent of the revenues the IRS collects through penal assessments are abated when citizens challenge the penalties.” So we now…

“Payroll Taxes are Due, with Penalties and Interest”

At least that is what the letter from the IRS says. First thing, do not panic. Quoting Daniel J. Pilla's study for the Cato Institute “About 40 percent of the revenues the IRS collects through penal assessments are abated when citizens challenge the penalties.”

So we now know the odds are good that the IRS is wrong or will blink first. What do we do?

The normal problems with payment taxes are.

Failure to File.

Taxes under reported.

Taxes under deposited.

Taxes deposited late.

Any of these can create a situation where the services charges penalties and interest against a business and then sucks up subsequent tax deposits creating additional late and short payments simply exacerbating the situation. We will get to that later.

Read the notice from the IRS. It should tell you why they are charging a penalty and interest and how it is calculated. If the notice does not lay out that information, you have missed the first notice from the IRS. That is not at all unusual. If you do not have the first notice call the IRS and get all the information from them. Also ask them to fax you a “Statement of Account” for the period and type of tax in effect. This will show you what they have on the IRS file, without regard to whether it is correct or not.

Failure to file.

The IRS says you never filed a return and they have created a return for you. They will estimate taxes due in an amount they know regardless of what would have been due due to your account. They do this to get your attention. Many people, if the estimated amount were too low, would just pay it. The IRS does not want that to happen so they always over estimate if they create a “Substitute Return” and file it for you.

The answer to that is to send a copy of the return. If you filed it certified mail send a copy of the receipt when it was sent providing the date and a copy of the return receipt showing it was received. One tip is never sending more than one return in an envelope. The clerk opening the envelope may staple them together and only the top return will ever be reported as being received. If you did not send it certified in your accompaniment letter talking about your history of filing on time and this one was certainly just misrouted. If you have collateral proof of the filing date like a canceled check that was sent with the return quote that information or even include copies. If the return was due on the 15th and the check attached cleared your bank on the 18th that is pretty convincing that the report was actually there by the 15th.

Taxes under reported.

Find out why they say that. Have they transposed a number when they hand entered the return? That happens with regularity. Have they just taken a number out of their hat? That happens periodically. Once we received two notices for two different customers on the same day saying they had overpaid their 940 taxes and offering them each a refund of over $ 36,000.00 each. The total 940 tax deposits for the two clients combined were less than $ 2000.00. And no, I did not let them apply for and receive the checks.

Again send the IRS a copy of the return that you filed. If the return is wrong then send the IRS a corrected form such as a 941-C to correct the original filing. For instance, if you put second quarter figures on the third quarter report. There will not be a penalty for late filing if in fact you filed an original return on time even if it was incorrect. A tip is if you can not prepare the actual return on time, estimate it and file it. Then file a corrected return when you can, this avoids a late filing fee.

Taxes under deposited.

They say you made fewer or smaller deposits than you reported. Check their list and dates of deposits against yours. Do not accept their word for when it was made. You have the proof in your files. We have noticed a real problem recently. EFTPS payments are not being shown with the date in the electronic file the same as on the “IRS Statement of Account.” How some programmer messed that up is beyond me. So prepare the data showing your proof that the payments were made on time, bank deposit slips, EFTPS confirmations or whatever proof you have. Package up copies and send them to the IRS with a letter of explanation, and a request for them to update their records.

If in fact you missed a deposit, it happens, make it immediately and ask for abatement anyway. Site valid reasons why the deposit could have been inadvertently missed. Discuss steps you have taken to make sure it will not happen again.

Taxes deposited late.

See taxes under deposited and do the same thing with dates. Document and send letters. Do not give up. Just because the first person at the IRS turns you down literally means nothing. They almost always turn down the first request for abatement of a penalty. Dealing with the IRS is a long series of no's followed by a single yes. When you do get the yes, shut up and walk away.

One of the favorite tricks of the IRS involves a string of deposits. Let's say you were suppose to make 12 deposits of $ 1000.00 each the 15th of each month starting Feb 15 and ending Jan 15th for January through December. The second deposit is missing, and the check never got cashed. You do not know what happened. The IRS will take the third payment and apply it to the second month's taxes but it is late so they charge a penalty. Now the fourth month's deposit gets applied to the third month's taxes but it is also a month late so there is another late paying penalty. You will quickly have 10 late payment penalties and the 12th month penalized as not being paid at all. The penalties exceeded the taxes missing. The service can not due this though they will try. If you design the third deposit for the third month taxes they must apply the payment there regardless. If they do not record them that way you can force them to do so, it is their regulations that say they must follow it. Accept the penalty only on the one month and then ask for abatement anyway. If you have never had a late payment the IRS is suppose to give you a free one anyway.

If you have a valid business reason that a penalty has occurred in spite of good due diligence on your part the IRS is suppose to abate the penalty. Understand that IRS employees may be gauged by how much revenue they bring in (the IRS vehemently denies this but ex IRS employees do not always). When that is true they do not want to abate penalies regardless. Another trick they have is to offer a reduced penalty as a favor, when in fact they should have zeroed it out. Or they will offer to abate penalies on two quarters if you pay the third. It is typically not a good idea to accept these offers. You can do better. Keep writing letters and filing documents at the higher and higher levels until one person gets reasonable and says yes. Then take that yes and run.

Can an ordinary citizen do this? Sure! Is it easier for a payroll tax professional? Sure! The IRS is far more likely to listen to a CPA than a citizen. The CPA knows what buttons to push and how to go to the next level. An ordinary citizen may not. The CPA is far less likely to get emotionally borrowed than the citizen whose pocket is being emptied.

Your payroll service provider should have CPAs on staff to handle these situations for you. If not, seriously consider a payroll service provider that does. Because when, not if, the IRS crews up your regular CPA will charge you full rate to solve problems that should be solved by your payroll provider for free.

Payroll Service, Changing Providers -Chapter One: Reasons to Change Providers

Why change your payroll provider? Service Stinks Cost too High Too many Errors No help with IRS Lost in the Shuffle Service Stinks. Payroll service is all about service. If you do not perceive that your business receives good service then you are probably not getting good service. Payroll service providers know that their level…

Why change your payroll provider?


  • Service Stinks
  • Cost too High
  • Too many Errors
  • No help with IRS
  • Lost in the Shuffle

Service Stinks. Payroll service is all about service. If you do not perceive that your business receives good service then you are probably not getting good service. Payroll service providers know that their level of service has to be extremely high. Are you getting what you were promised? Too often salespeople promise what production can not deliver. Are your problems addressed, and more importantly solved, immediately. If your account has been overdrafted and you do not get your money back in two business days or less you are not getting good service.

Cost too High. Are you paying more than you should? How do you tell? Get some quotes. There are a number of free quote services on line. Google “Payroll quotes” and go from there. Many times your payroll company will negotiate with you if you feel the price is too high, but not always. Remember also that the major payroll companies have a revenue maximization process. They will quote you a price to get your business. There used to be right on the Paychex contract a line called WIT for the salesperson to fill in. WIT stand for “Whatever it Takes”. The salesperson would give any concession to get the payroll business. Then the local office would stealthily increase the price every payroll or every few payrolls until it reached the maximum level the local office thought it could sustain.

The other thing a lot of payroll companies do is quote you prices but do not tell you what is not included in that price. Things like a cost for: each hire, each termination, each report, each new report, each non standard report, each W2, each W2 reprint, tax service, phone entry, year end reports, unnecessary CDs, access fees, monthly fees and so on. Also if they give you a “discount” to get your business it can easily vanish.

Be careful of quotes to make sure everything is in them and your price is guaranteed for a period of time. Then check it every pay period to make sure it is what you expect.

Too many errors. Errors are inevitable when humans handle the payroll. If your service is making too many then you may choose to leave what ever the cost. Errors cost you in time and morale if not in actual dollars. Does your payroll provider try to fix blame for an error or do they just fix it. They should just fix it! If it really is your error and you admit it, expect a fee. If you think it is their problem and say so, they should take responsibility regardless of what they think. Does your payroll provider call you if they see something strange or do they just do it their way? If they do it their way you know they are not concerned enough about you to make a phone call or send an email.

Every employee of every client looks at payroll and needs for it to be perfect. It will not be, but it needs to be as close as possible

No help with the IRS. Does your payroll service when presented with a letter from the IRS tell you to call your CPA? Shame on them. The IRS will send you letters. The IRS makes mistakes. The IRS will not fix their mistakes unless and until you can prove to them they are wrong. Many times even if you made the mistake a good negotiator can get the IRS to remove the penalties and sometimes the interest. I can not tell you how many penalties in the last fifteen years I have had abated simply by contacting the IRS in a professional manner and knowing what to say and how to say it. Your payroll service provider should be an expert in getting penalies abated. Your CPA will probably not be a payroll tax expert. Your payroll service provider should have CPAs on staff, that you can talk with to resolve IRS and State tax problems.

Lost in the shuffle. Do you talk to a different person every time you call your payroll service provider? Do you get passed from extension to extension to extension until you end up with voice mail that is not returned? When you call for help do you get a voice mail system and not a person? When you call for help do you reach India? If you can not talk to live people, who can solve your problems and do it in English, then you are lost in the shuffle. Enough said!

Check out

Payroll Service, Changing Providers. Chapter Two. What Should you Look for in a New Provider?

And

Payroll Service, Changing Providers. Chapter Three, What Should Happen When We Change Payroll Providers?

Payroll Service, Changing Providers – Chapter Two: What Should you Look for in a New Provider?

Service Technology Professionalism Cost Location Service. Can your new provider handle your unique needs? You can only ask. But do not just take their word. Ask for references in your size and type of business. Smaller providers may only be able to get close but that is OK. You're concerned about how, not what, service…


  • Service
  • Technology
  • Professionalism
  • Cost
  • Location

Service. Can your new provider handle your unique needs? You can only ask. But do not just take their word. Ask for references in your size and type of business. Smaller providers may only be able to get close but that is OK. You're concerned about how, not what, service is provided. Ask the references for other reference back to the provided that they did not provide you with. That is where you may get your best information. But in all fairness, remember the old adage “You can not make all of the people happy all of the time.”

Technology. Is the provider up to date on billing technology? It is hard for the major payroll providers to upgrade a system for hundreds of thousands of users. They will always be slower to change just because of size and inertia. The very small payroll service providers can not afford the newest technology. You also do not want bleeding edge technology just leading edge. Currently (and this changes all the time) you want to talk about paperless payroll, online payroll, payroll debit cards and employee self-service. There are other topics that will apply to your unique circumstances.

Professionalism. How long as the company was in business? They are a fly-by-night outfit and will disappear with your tax deposits. Do they have standing in the community? Are they an EFTPS batch filer mean they have at least 100 clients that file tax deposits for?

Do they have qualified payroll professionals and CPAs on staff to handle problems? You will have dealings with the IRS if nothing else over mistakes that the IRS makes. Without a CPA on staff you will either have to deal with the IRS yourself or pay your regular CPA to handle the problem. If your CPA does not deal with salary tax problems on a regular basis it will be time consuming for him, and expensive for you. to get up to speed with IRS procedure and policy on an area he does not deal with daily.

Cost. How important is cost in the mix of factors in making a decision on which payroll service provider you choose? That question you have to ask yourself. If all other things mentioned above were equal then cost would be the determining factor. If you get the best price and then spend hours every pay period because of obsolete technology, hours fixing their mistakes. Then spend hours placating your employees. Then spend hundreds of dollars with your CPA fixing an IRS error because the new payroll service provider has no CPAs on staff. What have you gained?

Please also review the cost paragraph in chapter one to better understand how payroll companies can mislead you about pricing.

Location. There was a time that location of a payroll company was important, delivery of checks and reports, long distance phone calls, local banking relationships and so on. Not so much in this day and age. With email and FedEx it does not matter very much where your payroll service provider is located in relationship to your business. With paperless payroll location is absolutely irrelevant as everything is handled over the Internet and all money is transferred through the banking system electronically.

Check out

Payroll Service, Changing Providers. Chapter One. Reasons to change Providers

And

Payroll Service, Changing Providers. Chapter Three. What should happen when I Change?

Payroll Service, Changing Providers – Chapter Three: What Should Happen when I Change?

What happens when I change Payroll Providers? Timing Forms Procedures Timing. It is easiest for all concerned to change payroll service providers at calendar year end. That way there is no question about responsibility for any tax forms or deposits. Every form, deposit or payment starting with January 1 is the responsibility of the new…

What happens when I change Payroll Providers?


  • Timing
  • Forms
  • Procedures

Timing. It is easiest for all concerned to change payroll service providers at calendar year end. That way there is no question about responsibility for any tax forms or deposits. Every form, deposit or payment starting with January 1 is the responsibility of the new payroll service provider. There is no trying to balance the salary numbers and make sure no terminated employee is missed and that all deposits were made on time. If you can not change at year-end then calendar quarter end (March 31, June 30, and September 30) is second best. That said, if you need or want to, you should be able to change at any time of the year.

How long should it take? The bigger the company the longer it will take simply because the more employees there are the more data there is. If you have employees in multiple states that will make the process take longer. You should always be able to take a business of 50 employees and change over in less than two weeks, from submitting the paperwork to a payday with the new payroll service provider.

Forms. The new payroll service provider should provide you with a complete set of forms. These will include bank authorization forms, employee data forms, direct deposit authorization forms, information sheets on the company, tax deposit frequency information, forms detailing earnings / obligations / benefits / accruals, payroll submission information and Powers of Attorney forms. This provides the new payroll service provider with all the standard data necessary to set up your payroll to suit your needs but gives the provider all the current data to bring files to date and be able to create year end forms such as a 940 and W2s.

Why the Power of Attorney forms? The CPA at the payroll service provider needs that form so they can discuss your account with the IRS and your State. Without these forms you must always be in the middle between the government and the CPA solving the problem. It works best for the CPA to work directly with the agents and officers at the IRS.

Also in the forms should be a privacy policy disclosure for your files. The best privacy policy is one that states no information is given out to anyone except under the order of a court of competent jurisdiction.

Procedures. Once you complete all the forms and returned them to the new payroll service provider the provider should follow up with any clarifications and provide additional forms if there are unique circumstance that require additional information. The provider should then provide you with the necessary training for you to create the input documents for payroll. They should go over with you or the person you designed exactly how payroll is entered. They should demonstrate any additional steps you as the client must take to keep your salary records accurate. They should confirm the first entry date and the first payday. They should answer any question you or your staff has about the procedures or output.

After the first payroll is entered and processed the provider should go over the reports and output with you to make sure there are no questions or misunderstandings.

Check out

Payroll Service, Changing Providers. Chapter One. Reasons to change Providers

And

Payroll Service, Changing Providers. Chapter Two. What Should you Look for in a New Provider?

Payroll Texas, Unique Aspects of Texas Payroll Law and Practice

There is no personal state income tax in Texas. Which means no withholding of State Income Taxes. The Texas State Agency charged with enforcing the state wage and hour laws is: The Texas Workforce Commission 101 East 15th St. Austin, Texas 78778-0001 512-837-9559 http://www.twc.state.tx.us/ Except for taxes and student loans there are no garnishments in…

There is no personal state income tax in Texas. Which means no withholding of State Income Taxes.

The Texas State Agency charged with enforcing the state wage and hour laws is:

The Texas Workforce Commission

101 East 15th St.

Austin, Texas 78778-0001

512-837-9559

http://www.twc.state.tx.us/

Except for taxes and student loans there are no garnishments in Texas. No credit other than the IRS or one of the student loan collection agencies can take money out of your paycheck without your permission.

The agency that collects and pays unemployment benefits is the Texas Workforce Commission.

Its main office is in Austin, Texas. Their address is:

Texas Workforce Commission

101 East 15th Street

Austin, Texas 78778-0001

512-837-9559

http://www.twc.state.tx.us/

The unemployment rate varies based on your company's experience but the initial rate starts at 2.7% on the first 9000.00 of wages paid to an employee in the state.

There is no requirement in Texas for a company to carry Workers Compensation Insurance. Texas is the only state where it is not required.

Texas now allows mandatory imposition of Direct Deposit. The employer just can not choose the financial institution the employee has the right to pick any financial institution that accepts direct deposits. There must be no additional fees to the employee for direct deposit.

Another unique aspect of Payroll in Texas is there is no provision in the State law for overtime. All overtime is governed only by FLSA if appropriate. So a purely intrastate employer in Texas does not have to legally pay overtime premium.

The state minimum wage in Texas is $ 5.15 per hour. It used to be well under federal rates.

In Texas you must pay at least semi-monthly except that FLSA-exempt employee can be paid on a monthly basis.

Payment on termination in Texas is six days for an involuntary termination and the next regular payday for a voluntary resignation

Texas requires the following information on an employee's paystub:

  • Employee's Name
  • Pay rate
  • Gross and net earnings
  • Amount and purpose of discounts
  • Hours worked or work done if piece work

Escheat laws in Texas require that unclaimed wages be paid over to the state after one year and 180 days if less than $ 100.00. The employer is further required in Texas to keep a record of the wages abandoned and turned over to the state for a period of 10 years.

Wages due a deceased employee are not covered by any provision in Texas.

Texas State new hire reporting requirements are that every employer must report every new hire and rehire. The employer must report the federally required elements of:

  • Employee's name
  • Employee's address
  • Employee's social security number
  • Employer's name
  • Employers address
  • Employer's Federal Employer Identification Number (EIN)

Plus they can optionally report

  • Date of Birth
  • Date of Hire
  • Payroll address for Child Support Notice

This information must be reported within 20 days of the hiring or rehiring.
The information can be sent as a W4 or equivalent by mail, fax or electronically.
There is no penalty currently for a late report.
The Texas new hire reporting agency can be reached at 888-839-4473 or on the web at [http://www.newhire.org/tx].

There is no provision in the Texas State Payroll laws covering mandatory rest or meal breaks.

Cafeteria Plan and 401 (k) deferrals that are exempt from federal income tax are counted as taxable income for unemployment insurance calculation in Texas.

Texas requires magnetic media reporting of earnings and contributions for unemployment insurance purposes if the employer has at least 250 employees to report.

Texas has no State Income tax so no State W2's have to be prepared, distributed or transmitted to the state

Texas has the following provisions for child support deductions:

  • When to start Withholding? Immediately after receipt of order.
  • When to send Payment? Within 7 days of Payday.
  • When to send Termination Notice? Within 7 days of termination.
  • Maximum Administrative Fee? $ 2 per month.
  • Withholding Limits? Federal Rules under CCPA.

The Texas agency charged with enforcement Child Support Orders and laws is:

Child Support Division

Office of the Attorney General

300 W. 15th Street

Austin, TX 78701

512-460-6000

http://www.oag.state.tx.us/child/#services

States have different requirements for maintaining wage and hour records that vary from the two or three years FLSA requires depending on the type of record. Texas has no provision in the law relating retention