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 team you can count on.
By using modern advances in technology and tax advantages, you can maximize your paychecks by utilizing several strategies:
Use direct deposit
Direct deposit greatly reduces the occurrence of delayed, lost, or stolen checks. Employees can establish multiple accounts and have a set amount or percentage of the paycheck automatically deposited into specified accounts. For example, the employee can deposit 10% of each paycheck into a personal savings account and the remainder to a checking account.
Take advantage of pre-tax benefits
There are several benefits that can be deducted from your paycheck before taxes are assessed, including health benefits, college savings plans, and flexible spending accounts. Deferring to these benefits means less of the paycheck will be subject to tax, which means more money goes in the employee’s pocket.
Maximize your 401(k)
An employee who contributes to a 401(k) or other retirement program helps to ensure his or her financial security in the future. If the company generously offers matching funds for retirement contributions, employees should contribute at least the same amount as the employer match, so they’re not missing out on “free” money.
Withhold the correct amount of taxes
The IRS offers a tax withholding calculator to aid employees in determining the correct withholding amount to claim on Form W-4, based on the employee’s pay, dependents, and other factors.
For more information regarding paychecks or to recognize your dedicated payroll professional at Nextep during National Payroll Week, please contact Nextep’s Payroll team.