Most business owners find payroll to be complex and confusing. They don’t have internal resources such as an HR department or payroll specialists to handle payroll and they can’t afford to fully outsource this essential function of their business. This book is designed to demystify payroll and help readers understand exactly what they need to do to get payroll right, answering key questions and providing specific, real-world guidance on the most important payroll topics.

Insights include:

• How a business owner sets up payroll can literally make or break a business—done right and it can run like clockwork but done wrong it can cause huge problems. How do you get started with proper payroll setup?
• Payroll errors cost time and money and usually result in disgruntled employees. How do you streamline and strengthen the payroll process to eliminate common (or not so common) payroll errors?
• Tax troubles can take down a small business overnight. How do you ensure your payroll is properly structured to comply with tax laws and regulations?
• Even if day-to-day payroll processing is going smoothly, business owners can’t neglect reporting and record retention. How do you keep good records to be prepared for future needs?
• Every business is different, and payroll has many nuances. How do you access the right payroll tools and resources at every stage of your business?
• With an icon-based layout and skimmable content structure, business owners can pick up the book and instantly gain value, regardless of where they are in their business life cycle.

CHARLES J. READ, CPA, has over 40 years of experience in the payroll industry and is the founder of Custom Payroll Associates and GetPayroll. He is a US Tax Court Practitioner, member of the IRS Advisory Council and a United States Marine Corp veteran.

Preface

How to use this book

Icons Used

Part One:  Payroll Setup

Chapter One - Business Entity

Corporation

Partnership

Sole Proprietorship

Limited Liability Company (LLC)

Chapter Two – Employees and Non-Employees

You

Family Members

Employees Versus Independent Contractors

Statutory Employees and Statutory Non-Employees

Children

Volunteers

Interns

Religious Workers

Chapter Three - Earnings

Salary

Executive exemption

Administrative exemption

Professional exemption

Highly compensated employees

Additional guidance

When an Employer May Make Deductions from Salary Payroll

Hourly

Basic Provisions/Requirements

Piecework

Training Wage

Subminimum Wage Provisions

Other payroll categories

Chapter Four - Deductions

Voluntary Deductions

Involuntary Deductions

Pre-Tax Deductions

Chapter Five - Taxes

Tax Numbers

Employee Taxes

Chapter Six -Tax Penalties

Penalties

Chapter Seven – Workweek, Pay Period, Payday

Workweek

Pay Frequency (Pay Period)

Payday

Chapter Eight – The Law

Federal

FMLA (Family Medical Leave Act)

Affordable Care Act

New Hire Reporting

Labor Posters

Davis Bacon and Walsh-Healy

The Equal Pay Act (EPA)

Part Two – Running a payroll

Chapter Nine – Collecting Time

Time Clocks

Chapter Ten – Calculating Payroll

Calculate Earnings Hourly

Overtime if a Staff Member Works Different Positions at Different Rates

Additions to Earnings

Reductions to Earnings

Chapter Eleven, Paying Your Employee

Method of Payment

State Rules

Pay Card

Wages for Deceased Employees

Chapter Twelve, Taxes Depositing and Filing

Part Three – Miscellaneous (But Important) Things

Chapter Thirteen - Record Keeping

Internal Revenue Service

Department of Labor

Family and Medical Leave Act (if you have 50 employees or more)

Title VII of the Civil Rights Act of 1964 and the Americans with Disability Act of 1990

The Age Discrimination in Employment Act of 1967

The Immigration Reform and Control Act

Payroll and Direct Deposit Records in General

Employee Handbook/Policy Manual

Medical Insurance

Chapter Fourteen – Workers’ Compensation Insurance

Workers Compensation

Chapter Fifteen - Payroll Security and Internal Controls

Manuals and Procedures

Hiring Who You Think

Internal Controls

Disaster Recovery

Form 944

Chapter Sixteen US Citizens Abroad, Resident and Non-Resident Aliens, Illegal Aliens

Non-Resident Alien Services Performed Outside the United States

Paying Non-Resident Aliens Inside the U.S.

Exceptions to Mandatory W/H of FIT on Nonresident Aliens

Paying Illegal Aliens

Chapter Seventeen – Other Issues

PEO

Human Resource Management or HR

Escheat

Technology / Outsourcing

Federal Laws Based on Number of Employees

The Employee Handbook/Policy Manual

Conclusion

Appendix: Payroll Tax Calendar

Glossary