National Payroll Week is next week! Running September 7-11, 2015, National Payroll Week is an occasion to celebrate American workers and the payroll professionals who serve them.
A paycheck with even one mistake can mean big trouble for an employee. In honor of National Payroll Week, Nextep's payroll pros offer 3 ways to ensure payroll accuracy.
1. Take time to look at time.
Timesheets are a key area where a number could be easily transposed or skipped. Even if your company uses an automated timekeeping system, take some time to look at the recorded hours and see if there are any red flags, such as too many hours, too few hours, or skipped lunches. Make sure also that any paid time off is recorded correctly. On that note
2. Calculating overtime pay may be trickier than you think.
Be careful to calculate overtime pay using a 40-hour workweek, no matter what amount of time the pay period covers. Here are two examples:
- Biweekly pay period: Simply pay overtime for hours worked over 40 in each of the two weeks. Don't base overtime on the entire 80-hour two-week period. Example: Joe works 42 hours one week and 38 hours the next. Joe will get two hours of overtime on his biweekly paycheck.
- Semimonthly: Since a semimonthly pay period covers roughly two and one-half weeks, one work week will usually be split among two paychecks. The employer must look at where the work week falls during those dates and may need to pay overtime that began accruing in the previous pay period.
Remember, overtime is calculated not necessarily on the employee's hourly rate of pay, but rather on the regular rate of pay, which includes an average of all hours worked plus any other earnings such as bonuses or shift differentials, excluding any holiday pay or paid time off (PTO).
Example, excluding PTO: Jane worked 36 hours and took 8 paid time off hours in a workweek. None of those hours are subject to overtime.
Example, using regular rate of pay: Jane worked 42 hours last week. Here hourly rate is $10 per hour. 8 of those hours were worked on the weekend when her rate raised to $12 per hour. She also got a bonus of $100. Janes regular rate of pay is $12.76, making her overtime rate $19.14, for a total of $548.68 gross. Here's the math: (34 hours x $10) + (8 weekend hours x $12) + $100 bonus = $536 | $536 / 42 hours = $12.76 regular rate of pay | ($12.76 x 40 regular hours) + ($19.14 x 2 OT hours) = $548.68 gross.
3. Promptly process new employees.
There's a flurry of paperwork that must be completed when a new employee joins your company, from I-9 to W-4, to benefit enrollment, and more. Delaying this paperwork would not only violate mandated deadlines, it could mean an employee doesn't get paid or that mistakes are made during the rush to get the information entered at the last minute. There are several resources to assist with onboarding forms, including the W-4 Withholding Calculator and I-9 Central.
For more information about National Payroll Week and how to have a flawless payroll process at your company, please contact Nextep's payroll department.