As an organization that manages payroll, you are likely aware of ongoing changes to payroll that you need to keep up with. Some of these things are out of your control, like tax rate changes. Though out of your control, you still need to stay up to date with those changes. Other changes occur within your company. Some changes are more complex than others, such as wage garnishment. You are required to comply with an employee’s wage garnishment mandate, and sometimes it can be a complex calculation. There are many more internal and external payroll factors that affect your business and your payroll. Can your current payroll system keep up with all these changes? Consider these functions and whether they apply to your organization, as these are functions that vary greatly among payroll software systems.
Multiple State Payrolls
Once you start paying employees in multiple states, things become more complex. Distributing employee pay to multiple locations must be considered. How will you make sure all employees receive their pay in a timely manner? Tracking and reporting can also be a challenge. Look for a system that allows you to track pay information by department, by company, by profit center, or a combination of these.
Processing a wage garnishment incorrectly can result in legal repercussions. Make sure that whatever software you choose is able to handle a multitude of scenarios as far as garnishment tracking. Garnishment calculations, minimum net pay, priority, and the priority of other deductions must all be considered. If your payroll system can’t help you manage this, you will have to track it by hand.
Earnings & Deductions
Earning codes in a software system track an employee’s pay rate. Deduction codes track an employee’s deductions, such as 401K, wage garnishment, etc. Many basic systems come with a standard set of deduction codes. But what if you need to pay an employee in a different way other than the basic codes that are offered? What if employee benefits are calculated in a unique way? In these situations it is helpful to have the ability to set up your own custom earning and deduction codes. Otherwise, you may need to use spreadsheets to track that information.
Do you need to pay employees for different rates, in different departments, for the same day? This unique requirement and those like it cannot be accomplished by many basic programs. Be sure the system you choose can handle the way in which you need to pay your employees.
Tax Filing Options
Maybe you started out typing tax forms on a typewriter, but today there are many more options available. Make sure your payroll software allows you to grow with the latest tax filing technology! Online tax filing or ‘eFiling’ reduces the time and cost associated with payroll tax filing, and you may even want to choose a complete tax filing option, so that someone else completes that for you.
Before you choose the cheapest payroll option available, consider the old saying “you get what you pay for”. You can find many “FREE” systems, or ones that seem low-cost at the start, only to balloon in price once you add on the functions you need. Check out the functions you need and choose a vendor that can handle your changing needs over the years.
Author: Susie Bowman