Payroll myths continue to influence the actions of many businesses. Those who don’t know tax reporting laws are the first to fall victim to these payroll myths.
Not sure what the most common payroll myths are? Then this article is for you! Today we’ll be shattering the biggest payroll myths that still exist today.
Switching Employees Over to Independent Contractors
Although this may sound appealing to some employers, it is not usually wise. Having independent contractors may provide certain financial benefits. They lack the legal protections that employees receive under labor and employment laws.
The tax, legal, and economic implications of misclassification can be severe. Taking the time to become educated about the applicable laws and regulations is essential. After a legal and financial evaluation has been conducted, switching employees over to independent contractors should be done.
All Tax-Free Benefits Are Exempted
One of the most held myths is that all tax-free benefits are exempted. Some tax-free benefits may be taxable in certain circumstances. So, employers and employees should be aware of the specific tax implications of any tax-free benefits provided.
It is also important to note that employers must still deduct and remit payroll taxes from any taxable benefits. Both employers and employees can ensure compliance with applicable tax laws. It is also important to note that employers must still deduct and remit payroll taxes from any taxable benefits. Both employers and employees can ensure compliance with applicable tax laws.
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Outsourcing Relieves You of Liability
It is important to remember that as the employer, you will still be responsible for ensuring your payroll is compliant with the applicable:
- other statutes
Outsourcing payroll processes can give you an extra layer of protection, but it is not a guarantee of compliance.
You are also still responsible for providing accurate and timely data to the payroll provider and reviewing their work. Even though you can outsource payroll, you should always keep a close eye on payroll processes to ensure compliance.
Incorporating Relieves You of Liability
Any types of payroll taxes the business must pay are still the responsibility of the business owners, even if the business is incorporated. The safe option is to comply with federal, state, and local laws and always maintain accurate documentation regarding payroll taxation.
Running a compliant payroll automation is crucial; failure to do so can mean a variety of costly fines and even criminal charges. The IRS takes payroll taxes very seriously, and any attempts to pay less than what is owed can have serious repercussions. Incorporating a business certainly has advantages, but true tax relief is not one of them.
Explore The Payroll Myths Today
Businesses everywhere should now understand the importance of accurate payroll processes. Embracing timely and effective methods to ensure exceptional working relationships with their employees.
Get in touch today and help us debunk the payroll myths!
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