Office Address
257 Old Churchmans Road, New Castle DE, USA - 19720
257 Old Churchmans Road, New Castle DE, USA - 19720
1. Payroll Processing
2. Next Day direct deposit
We mainly process the payroll through the direct deposit, employees receive the payment directly in their bank/pay card account, Employees can get the payment next day because of our advance and accurate payroll system, and this allows them to access the money quickly and easily.
3. Federal, State and Local tax payments and filings
Federal Tax- This is imposed by the Internal Revenue Service (IRS) to all the employees work in United States (US). This is the most mandatory tax amongst all the taxes for an employee. We withhold the Federal taxes from each of the employee’s payroll and deposit them to the IRS within the due date, so we should not get any penalty notice from the IRS.
After making the payment we ensure that the federal tax filing is done quarterly and it follows the IRS guidelines.
State and Local tax- The states also impose the taxes on the employees and employers as well, we follow the same process with the state and local taxes as we do with the Federal tax. We withhold the state & local taxes (if any) from the employees’ payroll and deposit them to the state tax agencies within the time line in order to avoid the tax notices or any delinquency notices from the agencies.
After making the payment we ensure the tax filing is done accordingly (monthly/quarterly)
There are a few states listed below, which do not have any personal income tax
New Hampshire also don't have the state tax. They currently do tax investment income and interest, but both are set to eliminate those taxes soon.
The amount of state and local income tax you pay will depend on how much income you earn and the tax rate of the state or locality where you live. To find out how much you owe and how to pay it, find personal income tax information by the state.
Your State Taxpayer Advocate can protect your rights, privacy, and property during the assessment and collection of taxes. Contact your state’s department of revenue to find out your rights and whether you have a taxpayer advocate or ombudsman.
4. Instant set up the new client (same day)
With the help of the advance payroll system, we start handling the payroll for our new client very quickly. We set up the new client in our system the same day, depends on the number of the employees.
5. Critical government tax notice resolution- Though it is our specialty that we do not miss any tax payment and filings the returns because we have such system which has the functionality to highlight the future tax payment & filing dates.
However, if you receive any notice issued by IRS or the state agency which requires immediate action to be taken on them –we have a separate team for this, which takes care of such critical notices. They have a very good experience in handling the government notices they are expert in co-ordinating with IRS or the state agencies in order to resolve the matters quickly.
6. New hire reporting to the state
State and federal law (409.2576, USA Statutes and 42 United States Code 653A) require USA Employers to report newly-hired and re-hired employees to the USA New Hire Reporting Center within 20 days of the employee start date.
7. Deductions & Contribution like, 401k, Benefits (Medical, Dental & Vision), Garnishment, and HSA etc.
401K Contribution-
(a) Traditional 401(k) s or Pre-tax other qualified retirement plans are made with Pre-tax, and so are deductible from your taxable income, it reduces the taxable wage.
(b) Roth plan is a post tax plan; it does not reduce the taxable wages.
Employee 401k(Traditional or Roth) contribution limits in 2020 is $19,500/year, Catch-up limit is $19,500+$6,500=$26,000/year (Age 50 and above)
Benefits (Medical, Dental & Vision)- We enroll the employees/employers for medical , dental & vision deductions in the payroll and make the payment to the provider after each payroll.
Garnishment- Setup the garnishments deductions in the payroll system once receive the court order from the client.
Health Saving Account (HSA)- We also setup the HSA deductions in the payroll system and start the deducting the same and making the payment to the provider.
8. PTO Calculation- We take care of the PTO calculations for each of the employees- our payroll systems has the functionality to accrue and adjust the PTO taken and show the accurate PTO balance in the employees’ account.
9. Processing all types of pay codes regular, PTO, bonuses, commissions, OT, retro, expense reimbursement & Severance etc.
Earning codes are the pay codes which categorize the types of the payment being made to the employees, why we need to have the multiple types of pay codes in the system. Because of the tax point of view, Taxes are calculated differently with different pay codes, some pay codes have normal tax rate, some have the supplemental tax rate or some have no tax, So we have to make sure that the appropriate pay codes are being selected while processing the payrolls, else taxes will not match with the IRS or the State agency’s rate and will be resulted in the Notices for Penalties and Interest.
Some of the main pay codes are listed below:-
It is paid same as of the regular pay code does, hence also be taxed according to the regular hours.
Hourly or non-exempt employees are normally not eligible for the PTO, because they get paid on hourly basis, so if they work they will get paid, if not work will not get paid .They are basically eligible for the over time payment when they work beyond the normal hours (8 hours).
However, it gets revised every year by the government.
Of the weekly 40 hours, suppose in some states it is calculated on a weekly basis means weekly hours should be more than 40 hours, regardless of worked more than 8 hours in any of the work days but not exceeding by 40 hours weekly.
In the below table, since he is a Californian employee, hence he is eligible for the OT on Thursday, however his weekly work is less than 40 hours.
But if he were from any other states, he would not be eligible for OT because he is not exceeding 40 hours/ weekly.
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California Employee, @ 20/hour |
||||||
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|
Mon |
Tue |
Wed |
Thu |
Fri |
Total Hours |
|
Hours |
8 |
6.5 |
5 |
10 |
6 |
35.5 |
|
|
|
|||||
|
Regular |
$670(33.5*20) |
|
||||
|
OT |
$60(2*20*1.5) |
|
||||
|
Gross Pay |
$730(670+60) |
|
|
|
|
|
Note:- This employee works more than regular hours (8 hours) only on Thursday, however his total weekly hours is less than 40 hours , though he is eligible for 1.5 times of regular rate for OT. He would have been paid double if any of the working days gone beyond the 12 hours.
10. State registration- We also do a state registration for our client, whenever any new employee gets hired from the state where company does not have any existing employee and company does not have withholding account. We collect the details from client and contact the State and work on to the registration process , we do the follow ups with state agency to have the withholding number and once we get the withholding account , setup it in the system so the withholding can be started and can file the returns.
11. Electronic pay stubs for employees – By the help of the payroll system employees can get the pay stubs immediate after processing the payrolls , we will provide them user id and password to access the pay stubs.
12. Manual check record – Sometimes employers need to issue manual checks to their employees in that case they need net amount to pay the employee, in this situation we calculate the payroll and provide the net amount to the client to issue the manual check to the employees and we record that manual check into the payroll system and make the tax payment electronically, so the employees payroll YTD should be updated into the system and also reflect in the employee’s W2.
13. Annual Federal Unemployment Tax Act (FUTA)- This is the tax paid by the employer only , employers require to pay a certain amount of money annually or quarterly against the unemployment benefits for employees who lose their jobs. Most businesses also have to comply with State Unemployment Tax Act (SUTA) which is imposed by the states to serve the same purpose with the federal tax.
Unlike the Social Security and Medicare taxes are withheld from employee’s paystubs, this is not the case with federal or state unemployment taxes Instead, both the federal government and state government collect unemployment taxes from the employers only.
2020 FUTA tax rate -
FUTA tax rate is 6% for 2020. It applies to the first $7,000 paid to each employee as wages during the year. This $7,000 is known as the taxable wage base.
After the first $7,000 in annual wages, employers do not have to pay federal unemployment taxes. Therefore, to calculate the FUTA tax for an employee who receives $7,000 in annual wages, they would multiply 7,000 by 0.06 to get $420.If employee who receives $8,000(7,000+1,000) in annual wages, employers should perform the same calculation on $7,000 to get $420, which is the maximum they would pay in FUTA taxes for any single employee. Employer should not pay FUTA on additional $1,000.
Not all payments to employees are included in the annual wage used to calculate FUTA tax responsibility. Generally, gross wages, most fringe benefits, and certain employer contributions to employee retirement plans are included in calculation and this total is subject to the 6% FUTA tax rate.
FUTA tax credit
Employers who pay their state unemployment insurance on time are eligible to receive a FUTA tax credit of up to 5.4%, which can result in an effective FUTA tax rate of 6%. The percentage employers get back depends on which state they do business in and whether that state has any outstanding federal unemployment insurance loans.
When are FUTA taxes due?
Employers are responsible for paying FUTA tax on a yearly basis if the FUTA tax liability is less than $500 in the quarter, if it goes beyond the $500 it should be paid quarterly, payment due date is one month after the end of each quarter:
14. Year-end payroll checklist- By the help of the below checklist we can have a smooth & hassle free year end. We process the year end task on time and set your business up for a successful new year.
After the year end:-