The end of another year is quickly approaching, which means that there will be all sorts of payroll and tax filings occurring in the near future. What can you do now to prepare and reduce stress over the next few months for employees and your payroll team?
Verify employee information
Ask employees to review names, social security numbers, and addresses. It is important that this information is up to date and accurate for W-2 purposes. This will reduce the amount of adjustments needing to be made after W-2 forms have been distributed to employees or filed with the government.
Review wage and contribution limits
Remember Department of Labor changes
In May of 2016 the DOL released overtime regulation changes that take effect on December 1, 2016. The wage threshold for salaried, exempt employees is increasing from $23,660 to $47,476 a year. If you have salary exempt employees that earn less than $47,476, you will need to one of three things:
- Increase the employee’s salary to the new threshold of $47,476,
- Convert the employee to an hourly rate, or
- Keep the employee at their current salary and begin tracking hours. If the employee works more than 40 hours in one week they would need to be paid overtime for those hours.
This is also not a bad time to review employee job descriptions and the DOL Duties Test information to ensure employees are being classified correctly.
Adhere to filing deadlines
There are some new filing deadlines this year, specifically for the electronic filing of payroll forms. January 31, 2017 will be an important date to remember as it is a new, earlier deadline for a number of submissions.
- W-2s are due electronically to both federal and state by January 31, 2017.
- ACA compliance forms are due to employees by January 31 and electronically to the IRS by February 28.
Report fringe benefit information
It will be beneficial to collect this information from employees as soon as possible and calculate any necessary taxability of fringe benefits. This would include calculations for personal use of company auto, long-term disability, group term life insurance, and moving expenses, among others.
Being mindful of these items, collecting and verifying information from employees, and reviewing it as early as possible will save time and headaches during that January crunch time!
By Kristen O’Connell, CPP, Payroll Supervisor