Nextep's 2021 Annual Report is here! See what we accomplished together this year.

3 Ways to Ensure Payroll Accuracy

Beth Dean 09.02.15
26 Coin Money

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.

Also on Nextep

Finding a PEO can be a daunting task. You should feel confident in your partnership with Nextep or any PEO for that matter. To ensure you do, we’ve put together a short checklist of questions to ask in your meetings with PEOs.  1. What accreditations and certifications do you hold?  A few credentials you’ll want […]
Read more
It’s important to know about upcoming changes to tax laws for businesses. Prepare your company’s budget with this cheat sheet! 2022 Tax Update Breakdown Social Security wage base First $147,00 of wages in 2022 FICA – Social Security (OASDI) 6.2%, up to the wage base FICA – Medicare 1.45% up to $200,000, then 2.35% (The […]
Read more
Along with the new year comes new minimum wages for several states on January 1, 2022, that employers should be aware of. As a reminder, when state law differs from federal law, employers must use the wage that benefits the employee the most. In this case, the state minimum wages are higher than the $7.25 […]
Read more
Tax season will be here soon! Nextep will make W-2s available online and send them directly to employee homes no later than January 31, 2021.  Here’s how you can prepare for the upcoming tax season.  Get Organized Take a look at last year’s tax return and make a note of any forms or technology you used […]
Read more
Along with the new year comes new minimum wages for several states on January 1, 2021. As a reminder, when state law differs from federal law, employers must use the one that benefits the employee the most. In this case, the state minimum wages are higher than the $7.25 federal minimum wage; therefore, the state’s […]
Read more
It’s important to know about upcoming changes to tax laws and Nextep is here to make sense of them all and help you prepare for next year’s budget. Here are the changes at a glance: Social Security wage base: First $142,800 of wages in 2021 (Was $137,700) FICA – Social Security (OASDI): 6.2%, up to […]
Read more
Please visit our COVID-19 resources page with more information for business owners and employees. Updates from the U.S. Department of Treasury and SBA. On June 10, 2020, the U.S. Department of Treasury and Small Business Administration (SBA) released additional guidance to provide clarity on the recently passed Paycheck Protection Program Flexibility Act (PPPFA). Here are […]
Read more
On June 5, 2020, the president signed H.R. 7010, the Paycheck Protection Program Flexibility Act, into law. This law clarifies terms of the PPP loan, eligibility, and loan forgiveness. Highlights include: Expanded repayment period There is now an expanded, five-year repayment period for the PPP loan for those who did not receive loan forgiveness, an […]
Read more
Please visit our COVID-19 resources page with more information for business owners and employees. Updates from the SBA and Department of Treasury On May 22, the Small Business Administration (SBA) and Department of Treasury released two interim final rules for loan forgiveness under the Paycheck Protection Program (PPP). While they clarified parts of the loan forgiveness application, […]
Read more
Please visit our COVID-19 resources page with more information for business owners and employees. PPP loan forgiveness application and instructions are available On Friday, May 15th, the Treasury and Small Business Administration released an application and instructions for Paycheck Protection Program (PPP) loan forgiveness, available here. Please note that the SBA has also stated that additional […]
Read more
The Department of Labor (DOL) recently announced its final decision on the calculation of the regular rate of pay, effective on January 15, 2020. The new rule clarifies common overtime pay issues and will allow employers to offer perks and benefits to their employees more efficiently.   Previous rules about the regular rate of pay Under […]
Read more
It’s National Payroll Week — a time during which payroll professionals celebrate their work and share their paycheck-stretching knowledge. Getting paid accurately and on time is important to employees and those who depend on them. That’s why it’s important to have the knowledge to make educated decisions about your payroll withholdings and deductions and a payroll […]
Read more

Download Our App