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

By Charles Read
What should you look for in a new payroll provider?


Service
Technology
Professionalism
Cost
Location?

Service. Can your new provider handle your unique needs? You can only ask. But don’t 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’t make all of the people happy all of the time.”

Technology. Is the provider up to date on payroll 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’t afford the newest technology. You also don’t 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 been in business? Are they 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 meaning they have at least 100 clients they 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 payroll 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 doesn’t 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. It does not matter 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 moved 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?




About the author:

Charles J. Read, CPA has been in the payroll, accounting and tax business for 30 years, the last fifteen in private practice.
Mr. Read is the author of “How to Start a New Business.”

To find professional payroll service at a budget price go to www.PayrollonaBudget.com a paperless payroll company.

For a full service payroll bureau with CPA’s on staff visit www.CustomPayroll.com .

See an excerpt of Mr. Read’s interviews from William Shatners “Heartbeat of America” television show on the web sites linked above.


Article Source: http://www.Free-Articles-Zone.com

Payroll Delaware, Unique Aspects of Delaware Payroll Law and Practice

By Charles Read
The Delaware State Agency that oversees the collection and reporting of State income taxes deducted from payroll checks is:

Division of Revenue Withholding Division
820 N. French St.
Wilmington, DE 19801
302-577-8200
www.state.de.us/revenue

Delaware allows you to use the Federal W-4 form to calculate state income tax withholding.

Not all states allow salary reductions made under Section 125 cafeteria plans or 401(k) to be treated in the same manner as the IRS code allows. In Delaware cafeteria plans are: not taxable for income tax calculation; taxable for unemployment insurance purposes. 401(k) plan deferrals are: not taxable for income taxes; taxable for unemployment purposes.

In Delaware supplemental wages are required to be aggregated for the withholding calculation..

You must file your Delaware State W-2s by magnetic media if you are required to file your federal W-2s by magnetic media.

The Delaware State Unemployment Insurance Agency is:

The Department of Labor
Division of Unemployment Insurance
4425 N. Market St.
Wilmington, DE 19802
302-761-8446
http://www.delawareworks.com/Unemployment/welcome.shtml

The State of Delaware taxable wage base for unemployment purposes is wages up to $8,500.00.

Delaware has optional reporting of quarterly wages on magnetic media.

Unemployment records must be retained in Delaware for a minimum period of four years. This information generally includes: name; social security number; dates of hire, rehire and termination; wages by period; payroll pay periods and pay dates; date and circumstances of termination.


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

The Department Labor
Division of Industrial Affairs
Labor Law Enforcement Section
4425 N. Market St.
Wilmington, DE 19802
302-761-8200
www.delawareworks.com

The minimum wage in Delaware is $6.15 per hour.

There is also no general provision in Delaware State Law covering paying overtime in a non-FLSA covered employer.

Delaware State new hire reporting requirements are that every employer must report every new hire and rehires. 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)

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 a $25.00 penalty for a late report in Delaware.

The Delaware new hire reporting agency can be reached at 302-577-7171 or on the web site at www.state.de.us/dhss/dcse/index.html .

Delaware does not allow compulsory direct deposit.

Delaware requires the following information on an employee's pay stub:

Wages due
pay period dates
hours worked for hourly workers
itemized deductions

Delaware requires that employee be paid no less often than monthly.

Delaware requires that employees must be paid within 7 days after the end of the pay period.

Delaware payroll law requires that involuntarily or voluntarily terminated employees must be paid their final pay by the next regular payday or by mail upon request.

Deceased employee's wages up to $300.00 must be paid to the surviving children under 21 custodian, surviving spouse, children 21 and over or the deceased's parents (in that order) when a "Proper Demand" has been made.

Escheat laws in Delaware require that unclaimed wages be paid over to the state after five years.

There is no provision in Delaware law concerning record retention of abandoned wage records.

Delaware payroll laws allow for a tip credit against Delaware State minimum wage of $3.92 per hour.

In Delaware the payroll laws covering mandatory rest or meal breaks are: a 30-minute meal period during a 7 and one half-hour shift. Taking place after the first two hours and before the last two hours o the shift.

The Delaware law requires that wage and hour records be retained for a period of at least three years.


The Delaware agency charged with enforcing Child Support Orders and laws is:

Division of Child Support Enforcement
P.O. Box 904
New Castle, DE 19720
302-577-7171
http://www.dhss.delaware.gov/dhss/dcse/services.html


Delaware has the following provisions for child support deductions:

When to start Withholding? 7 days after first payday after receipt of order.
When to send Payment? Payday.
When to send Termination Notice? "Promptly" Maximum Administrative Fee?
No Provision
Withholding Limits? Federal Rules under CCPA.




Please note that this article is not updated for changes that can and will happen from time to time.




About the author:

Charles J. Read, CPA has been in the payroll, accounting and tax business for 30 years, the last fifteen in private practice.
Mr. Read is the author of “How to Start a New Business.”

To find professional payroll service at a budget price go to www.PayrollonaBudget.com a paperless payroll company.

For a full service payroll bureau with CPA’s on staff visit www.CustomPayroll.com .

See an excerpt of Mr. Read’s interviews from William Shatners “Heartbeat of America” television show on the web sites linked above.


Article Source: http://www.Free-Articles-Zone.com

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

By Charles Read
What should happen when I change payroll service 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 payroll numbers and make sure no terminated employee is missed and that all deposits were made on time. If you can’t 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 however 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/deductions/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 designate exactly how payroll is entered. They should demonstrate any additional steps you as the client must take to keep your payroll 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.


Also check out the following Articles

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?




About the author:

Charles J. Read, CPA has been in the payroll, accounting and tax business for 30 years, the last fifteen in private practice.
Mr. Read is the author of “How to Start a New Business.”

To find professional payroll service at a budget price go to www.PayrollonaBudget.com a paperless payroll company.

For a full service payroll bureau with CPA’s on staff visit www.CustomPayroll.com .

See an excerpt of Mr. Read’s interviews from William Shatners “Heartbeat of America” television show on the web sites linked above.


Article Source: http://www.Free-Articles-Zone.com

Payroll goes Green - Environmentally Correct Payroll

By Charles Read
Paperless Payroll - Going Green Saves More than Trees

With much anticipation and fanfare Apple recently rolled out its iPhone, which promises to usher in the next generation of wireless communications. With the buzz over such mobile computers, mobile phones, iPods etc. we may be growing more “wireless”, yet we are far from a “paperless” society. In fact, despite advances in electronics the average office worker in a typical business still uses about 50 sheets of paper everyday!

Despite the increased use of the Internet and digital technology, paper consumption for most businesses is actually increasing by 20 percent every year and that voracious appetite shows very little sign of abating. From printing out e-mails to Web pages, even digital photographs, the office is a place of major amounts of paper use and paper waste. Unnecessary paper consumption is costly. It wastes time and productivity; it consumes energy and adds to deforestation. And what is one of the main culprits? Processing payroll.

There are some businesses that are certainly more “paper-dependant” than others; law firms, banking and financial institutions, medical and healthcare businesses for example. However, every business has a payroll. And believe it or not, the simple act of printing and providing payroll checks and reports consumes massive amounts of paper.

Paperless Payroll, Green Savings

Let’s take a look at an average size company with a payroll of 40 employees paid bi-weekly. To print those checks and reports, put them in pay envelopes and deliver them requires two pounds of paper every two weeks, or 52 pounds a year. Figure a round trip of eight miles for each employee driving to the bank to cash or deposit his or her check and that makes 320 miles driven just for payroll transactions every two weeks, or 8,320 miles per year. That eight thousand some-odd miles of driving per year costs employees over $1,200 in gasoline alone and results in increased greenhouse gas emissions. Now multiply that number by the millions of businesses nationwide and you are looking at hundreds of thousands of tons of wasted paper and significant increases in greenhouse gas emissions.

Those figures represent just part of the environmental cost in merely the printing and distribution of paper payroll checks and reports. It does not take into account the other paper-consuming activities of the typical payroll department such as faxed input sheets, checks returned to the issuing bank, recording and reconciling paper checks, W2’s, tax reports and other payroll documentation. The list goes on and should include energy usage for creating and delivering the paper at all levels from forest to landfill.

Payroll Goes Green

But it doesn’t have to be that way. For one thing, there is a growing tendency for businesses to outsource payroll services to an outside payroll company. This saves the business money in reduced labor cost alone and, in theory, cuts down on a lot of the paper used by an in-house payroll department. And while it is a smart decision to reduce costs by turning over payroll services to an outside payroll company, it is an even smarter choice to use a payroll service that itself is environmentally conscious. One such company is Custom Payroll Associates, Inc. a pioneer in the development of a fully secure, one hundred percent paperless payroll solution. Says Charles Read, CEO and founder of the company, “We decided early on that we wanted to provide payroll services to the small and medium business at an effective price point, and provide a higher level of service than our competitors. We realized that to do that we had to use the latest and the very best technology available. That meant using the Internet and going completely electronic. What started as efficiency and cost saving for our clients grew into the realization that by providing a 100 percent paperless solution we were actually saving our clients even more money by reducing energy costs and reducing the negative impact on the environment.”

There is no doubt that, in the short term, switching to paperless payroll, even internally, saves a company money. Microsoft, one of the first large businesses to initiate a paperless payroll solution, claims the move has saved the company millions a year. Even an average size company can save over $150,000 per year by going paperless for payroll, states industry experts. Add to that the much smaller margin for error in paperless payroll, along with the environmental benefits, and paperless payroll is truly a win-win.

Across the nation, indeed across the globe, paper and pulp is the single largest industrial consumer of forests and the fourth largest consumer of energy. Furthermore, taking into consideration the chemical and bleaching processes used to whiten the pulp and create paper, and all of the office paper that ends up in landfills, it is easy to see office paper consumption is hardly environmentally friendly.

The paperless office has been predicted for more than 10 years now, yet according to the U.S. Department of Labor and the Environmental Protection Agency paper consumption by businesses still has increased more than six-fold over the last 50 years. As Charles Read can testify, today there is absolutely no reason for a business to still have a paper payroll system. “A business of any size has nothing to lose by outsourcing to a paperless payroll company and we all have so much to gain.”

Again, the average business of 40 employees that chooses to outsource to a paperless payroll company will not only see thousands of dollars in savings in their actual payroll costs but will also:

• Reduce greenhouse gas emissions
• Reduce energy use in all phases of paper and payroll production
• Save numerous gallons of wastewater for paper production annually
• Reduce consumption of trees substantially
• Save their employees time and money while helping the environment
• Decrease landfill usage

This overwhelming evidence of positive environmental benefits and cost-savings for the business makes a compelling argument for paperless payroll.


What Else Can Be Done

The average American office worker uses over ten thousand sheets of paper per year. Besides companies switching to a paperless payroll system, there is a lot that each of us can do to reduce our paper consumption around the office.

• Print on both sides of a sheet of paper.
• Use recycled paper whenever you can and recycle whatever paper you use.
• Use paper properly. Improperly stored paper accumulates dust, dirt and water vapor that leads to paper jams in machines and wasted paper.
• Choose environmentally responsible suppliers and vendors.

Implementing positive environmental processes is not a political issue – it’s a human issue. Switching to paperless payroll through a company like Custom Payroll Associates, Inc. not only saves businesses a little "green", but it creates a safer, healthier "green" living space for us all.




About the author:

Charles J. Read, CPA has been in the payroll, accounting and tax business for 30 years, the last fifteen in private practice.
Mr. Read is the author of “How to Start a New Business.”

To find professional payroll service at a budget price go to www.PayrollonaBudget.com a paperless payroll company.

For a full service payroll bureau with CPA’s on staff visit www.CustomPayroll.com .

See an excerpt of Mr. Read’s interviews from William Shatners “Heartbeat of America” television show on the web sites linked above.


Article Source: http://www.Free-Articles-Zone.com

Payroll California, Unique Aspects of California Payroll Law and ...

By Charles Read
The California State Agency that oversees the collection and reporting of State income taxes deducted from payroll checks is:

Employment Development Department
800 Capitol Mall
Sacramento, CA 95814
888-745-3886
www.cahwnet.gov/taxind.htm


California requires that you use California form "DE 4, Employee's Withholding Allowance Certificate" instead of a Federal W-4 Form for California State Income Tax Withholding.

Not all states allow salary reductions made under Section 125 cafeteria plans or 401(k) to be treated in the same manner as the IRS code allows. In California cafeteria plans: are not taxable for income tax calculation; are not taxable for unemployment insurance purposes. 401(k) plan deferrals are: not taxable for income taxes; are taxable for unemployment purposes.

In California supplemental wages are taxed at a 6% flat rate, 9.3% for stock options and bonuses.

You are not required to file California State W-2s.

The California State Unemployment Insurance Agency is:

Employment Development Department
P.O. Box 826880 - MIC 94
Sacramento, CA 94280-0001
888-745-3886
www.edd.cahwnet.gov/


The State of California taxable wage base for unemployment purposes is wages up to $7000.00.

California requires Magnetic media reporting of quarterly wage reporting if the employer has at least 250 employees that they are reporting that quarter.

Unemployment records must be retained in California for a minimum period of four years. This information generally includes: name; social security number; dates of hire, rehire and termination; wages by period; payroll pay periods and pay dates; date and circumstances of termination.

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

The Department of Industrial Relations
Division of Labor Standards Enforcement
P.O. Box 420603
San Francisco, CA 94142-3660
www.dir.ca/gov/dlse/dlse.html

The provision in the law for minimum wage in the State of California is $6.75 per hour.

The general provision in California State Law covering paying overtime in a non-FLSA covered employer is one and 1/2 times regular rate after an 8 hour day, 40 hour week in most industries. Check for other overtime rules and exemptions.

California State new hire reporting requirements are that every employer must report every new hire, rehire and contractor who is paid over $600.00. 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 date of hire; state EIN; date, dollar amount, expiration date of contract.

This information must be reported within 20 days of the hiring or rehiring; or after $600.00 minimum is met or contract is signed whichever is earlier.
.
The information can be sent as a W4 or equivalent DE34 by mail, fax or electronically.
There is a $24.00 to $490.00 penalty for a late report in California.

The California new hire-reporting agency can be reached at 916-657-0529 or on the web at www.edd.cahwnet.gov/txner.htm

California does allow compulsory direct deposit but the employee's choice of financial institution must meet federal Regulation E regarding choice of financial institutions.

California does not allow compulsory direct deposit

California State Wage and Hour Law provisions concerning pay stub information detail the following information must be on the paystub.

Gross and net earnings
Hours worked at each hourly rate for hourly workers
Piece rate and number of pieces
Deductions
Pay period dates
Employee's name and social security number
Employer's name and address

In California employees must be paid at least semimonthly, monthly for FLSA exempt employees. The lag time between earned and paid is governed by statute in California. Wages earned from the 1st through the 15th of the month must be paid by the 26th. Wages earned from the 16th through the end of the month must be paid by the 10th of the following month. Exempt employees by the 26th of the month for the entire month (a safe harbor is payment within 7 days after the pay period.)

California payroll law requires that involuntarily terminated employees must be paid their final pay immediately; within 72 hours for seasonal employees; within 24 hours for certain motion picture (by next payday if laid off) and certain oil drilling employees. Voluntarily terminated employees must be paid their final pay within 72 hours; immediately if 72 hours' notice of quit is given; strikers on next regular payday.

Deceased employee's wages to a maximum of $5,000.00 must be paid to the surviving spouse or conservator when an Affidavit of right and proof of identity are presented.

Escheat laws in California require that unclaimed wages be paid over to the state after one year.

The employer is further required in California to keep a record of the wages abandoned and turned over to the state for a period of seven years.

There is no provision in California law concerning tip credits against State minimum wage.

In California the payroll laws covering mandatory rest or meal breaks are a 30-minute meal break after five hours; 30 minutes after 10 hours; 10-minute rest after four hours.

California law concerning record retention of wage and hour records is two years.

The California agency charged with enforcing Child Support Orders and laws is:

Department of Child Support Services
P.O. Box 944245
Sacramento, CA 95244-2440
916-654-1532
www,childsup,cahwnet.gov/default.htm

California has the following provisions for child support deductions:

When to start Withholding? 10 days after service
When to send Payment? Within 7 days of Payday.
When to send Termination Notice? When next payment is due
Maximum Administrative Fee? $1 per payment.
Withholding Limits? 50% of disposable earnings.




Please note that this article is not updated for changes that can and will happen from time to time.




About the author:

Charles J. Read, CPA has been in the payroll, accounting and tax business for 30 years, the last fifteen in private practice.
Mr. Read is the author of “How to Start a New Business.”

To find professional payroll service at a budget price go to www.PayrollonaBudget.com a paperless payroll company.

For a full service payroll bureau with CPA’s on staff visit www.CustomPayroll.com .

See an excerpt of Mr. Read’s interviews from William Shatners “Heartbeat of America” television show on the web sites linked above.


Article Source: http://www.Free-Articles-Zone.com