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Outsourced Payroll Services: Unleashing Transformational Power

Outsourced Payroll Services: Unleashing Transformational Power

If you’re grappling with the intricacies of running a business, especially concerning payroll management, Outsourced Payroll Services offer a beacon of hope. When it comes to running a business, keeping your payroll running smoothly is paramount. But for many, managing payroll can quickly become a daunting task. That’s where outsourced payroll services step in as your trusty sidekick, swooping in to save the day and transform your payroll processes for the better.

For HR leaders looking to alleviate the burden of payroll management and enhance your business efficiency, Launchways has your back.

The Benefits of Outsourced Payroll Services

Outsourcing your payroll can be a game-changer for your business. Not only does it streamline payroll processing, but it also ensures compliance with tax regulations and labor laws. Plus, it saves you valuable time and money that you can reinvest back into your business. It basically provides all the benefits with none of the hassle.

Now, let’s talk about the elephant in the room.

Impact of the 2024 DOL Rule on Outsourced Payroll Services

The Department of Labor (DOL) rule that took effect on March 11, 2024 is shaking things up in the world of outsourced payroll services. Essentially, it clarifyies the classification of independent contractors. This coule be a game-changer.

With this new rule in place, businesses utilizing outsourced payroll services will need to stay on their toes. It’s not just about processing payroll anymore – it’s about ensuring compliance with the new regulations. Many HR leaders know, though, that with the right outsourced payroll provider by your side, navigating these changes can be a breeze.

The right technology could be considered a great equalizer. 

Harnessing Technology for Enhanced Efficiency

When it comes to outsourced payroll services, technology is your best friend. From automation tools to sophisticated software, technology can revolutionize your payroll processes like never before. It’s like having a supercharged engine under the hood of your business – smooth, efficient, and powerful.

But here’s the kicker – technology is only as good as the people behind it. That’s why choosing the right outsourced payroll provider is crucial. You want a team that not only knows their stuff but also understands your unique business needs. That can make all the difference–especially with compliance and accuracy.

Ensuring Compliance and Accuracy

Compliance may not be the most exciting subject, but it is non-negotiable when it comes to payroll. One slip-up could land you or your company in hot water faster than you can say “tax audit.”

That’s why outsourced payroll services are so valuable. They take the guesswork out of compliance, ensuring that your payroll is accurate and up-to-date. 

Imagine it. There will be no more late-night panic sessions or frantic Google searches – just the peace of mind knowing that your payroll is in good hands.

Customized Solutions for Businesses

Something to realize about outsourced payroll services, however, is one size does not fit all. Every business is unique. Every company has its own set of challenges and goals. That’s why you need a payroll provider that offers customized solutions tailored to your specific needs.

Whether you’re a small startup or a large corporation, the right outsourced payroll provider can make all the difference. 

They’ll work with you to understand your business inside and out, crafting a payroll solution that fits your company perfectly. It’s like having a personal chef for your payroll – deliciously customized and oh-so-satisfying.

Key Points

  • Outsourced payroll services offer a multitude of benefits, including streamlined processing and compliance assurance.
  • The March 11, 2024 DOL rule has implications for businesses utilizing outsourced payroll services, emphasizing the need for compliance.
  • Technology plays a pivotal role in enhancing efficiency within outsourced payroll services, but the human touch is equally important.
  • Compliance and accuracy are paramount in payroll processing, making outsourced payroll services a valuable asset.
  • Customized solutions tailored to individual business needs are essential for maximizing the benefits of outsourced payroll services.

In Conclusion

To wrap it up, outsourced payroll services have the power to transform your business for the better. With the right provider by your side, you can say goodbye to payroll headaches and hello to newfound efficiency and peace of mind. 

Looking to alleviate the burden of payroll management and enhance your business efficiency? Why wait? Contact Launchways to harness the transformative power of outsourced payroll services today and take your business to new heights! 

With our expert guidance and tailored solutions, we provide invaluable support to streamline and enhance your processes, ensuring your payroll runs seamlessly and allowing you to focus on what truly matters – growing your business.

Understanding IRS Tax Adjustments for 2024

Understanding IRS Tax Adjustments for 2024

It’s that time of the year again to find out which of the newest IRS Tax Adjustment changes might impact your employee benefits and tax credit eligibility. This information could be instrumental in updating your company’s compensation strategy.

In a recent announcement made by the Internal Revenue Service (IRS) in early November, significant annual inflation adjustments were unveiled for over 60 tax provisions for the tax year 2024. These adjustments encompass tax rate schedules and various other tax modifications.

Overview of 2024 Tax Adjustments

Primarily affecting income tax returns filed in 2025, the alterations in tax provisions for 2024 are crucial for taxpayers. The most noteworthy adjustments pertain to cost-of-living changes in several tax limits, covering employee benefit plans, small businesses, and the premium tax credit.

Key Highlights for Taxpayers

Upon exploring the comprehensive list and detailed news release available on the IRS website, several vital changes come to the forefront, particularly concerning employee benefit plans:

Health Flexible Spending Accounts (FSAs)

For the tax year 2024, the cap on employee salary reduction contributions to health FSAs will be set at $3,200, marking an increase from the previous limit of $3,050. Additionally, if permitted by the cafeteria plan, health FSA carryovers to the 2025 plan will reach a maximum of $640, previously at $610.

Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs)

QSEHRAs for 2024 reveal significant adjustments, with self-only coverage reaching a maximum of $6,150 and family coverage rising to $12,450. This demonstrates a considerable increase from the prior figures of $5,850 and $11,800, respectively.

Dependent Care Assistance Programs (DCAPs)

Despite adjustments in various areas, the maximum amount of DCAP benefits excluded from income remains static at $5,000/$2,500 for the tax year 2024. There are no cost-of-living modifications anticipated for future years unless extended or altered by Congress.

Premium Tax Credit Limitations

Starting in 2024, there are specific limitations on tax for excess advance credit payments, which vary based on household income brackets:

  • For unmarried individuals not including surviving spouses or heads of households, household income below 200% of the Federal Poverty Line (FPL) will have a limit of $375. This limit rises to $950 for income between 200% and less than 300% of FPL and to $1,575 for income between 300% and less than 400% of FPL.
  • For all other taxpayers, the limitations are set at $750 for income below 200% of FPL, $1,900 for income between 200% and less than 300% of FPL, and $3,150 for income between 300% and less than 400% of FPL.

Conclusion: Implications for Taxpayers

The annual adjustments announced by the IRS for tax year 2024 carry considerable significance for taxpayers, specifically impacting their benefits, health coverage, and tax credit eligibility. These modifications underscore the importance of staying informed about evolving tax regulations and understanding how they may influence personal finances. For a comprehensive understanding of these changes, taxpayers are encouraged to visit the IRS website for detailed information and guidance.

Managed Payroll Services: Unlocking Cost Savings through Outsourcing

Managed Payroll Services: Unlocking Cost Savings through Outsourcing

Efficient payroll management is a critical aspect of running a successful business. However, the decision to handle payroll internally or outsource it to a managed payroll services provider can be challenging. In this blog post, we will explore the benefits of managed payroll services and shed light on the cost savings that can be achieved by outsourcing instead of hiring an internal payroll specialist.

1. The Burden of Hiring and Training:

When opting for an internal hire, the process begins with sourcing, interviewing, and selecting a qualified payroll specialist. This not only incurs recruitment costs but also demands time and effort. After hiring there is a need for training to ensure the individual is well-versed in the company’s payroll procedures and any legal or compliance requirements. On the other hand, with managed payroll services, the burden of hiring and training is eliminated, saving valuable resources.

2. Technology Infrastructure and Maintenance Costs:

Managing payroll internally involves investing in payroll software, IT infrastructure, and maintaining the systems. The costs associated with software licenses, upgrades, hardware, and data security measures can add up significantly. In contrast, managed payroll service providers already have state-of-the-art technology infrastructure in place. By outsourcing, businesses can eliminate the need for costly investments and ongoing maintenance, resulting in substantial cost savings.

3. Compliance and Legal Expertise:

Payroll regulations and tax laws are constantly evolving, making compliance a complex and time-consuming task. Non-compliance can lead to penalties and legal consequences. Managed payroll service providers specialize in payroll compliance and possess the expertise to navigate intricate regulations effectively. By outsourcing, businesses can tap into this knowledge base and ensure compliance while avoiding potential fines or legal complications.

4. Scalability and Flexibility:

As businesses grow, payroll needs expand. Managing payroll internally requires constant adjustments to accommodate changing employee numbers, new benefits programs, and evolving tax requirements. This can strain internal resources and increase costs. Managed payroll service providers offer scalable solutions that effortlessly adapt to your business’s changing needs. By outsourcing, businesses can ensure seamless scalability without incurring additional expenses.

5. Time and Efficiency:

Processing payroll internally demands a significant amount of time, particularly during payroll periods. The manual calculation of wages, deductions, and tax withholdings can be labor-intensive and prone to errors. By outsourcing to managed payroll services, businesses can streamline the payroll process and free up valuable time for internal staff to focus on core business activities, enhancing productivity and overall efficiency.

Final Thoughts

While hiring an internal payroll specialist may seem like a logical choice, businesses can achieve significant cost savings by opting for managed payroll services. From eliminating recruitment and training expenses to reducing technology infrastructure costs and ensuring compliance, outsourcing payroll can unlock a multitude of benefits. By entrusting payroll responsibilities to experts, businesses can enhance efficiency, save money, and redirect resources towards strategic growth initiatives.

The Most Common Payroll Mistakes Your Startup Is Probably Making

Having smooth payroll processes in the foundation of smooth people operations. As much as your team likely enjoys their roles, it’s the regular paychecks that keep them coming back to work every day.

Conversely, if your payroll processes have errors or inefficiencies, it can wreak havoc on employee morale. Your employees will never know if the next paycheck will be on time and accurate. At startups where lean teams are tasked with throwing payroll on their to-do list, it’s all-too common for critical errors to be made.

In this post, we’ll cover:

  • What are Some Common Payroll Mistakes?
  • How to Avoid Common Payroll Mistakes
  • Outsourcing Payroll to Mitigate Payroll Risk

What are Some Common Payroll Mistakes?

There are several mistakes that are commonly made with inexperienced or overworked teams tackle payroll.

  • Misclassifying Employees: Tax laws and benefits contributions are generally different for independent contractors than they are for traditional, in-house employees. If an employee is classified incorrectly, it could cause inaccurate contributions towards benefits and taxes. These types of errors can cause significant headaches for both the employee and the employer as they attempt payroll corrections post-processing.
  • Failing to Send Tax Forms: Sending out your W-2 and 1099 forms as early as possible after the start of the calendar year can go a long way towards making tax season easier on your employees. On the other hand, if it’s late January and your employees have not receive all the forms they need to complete their taxes, they may be left feeling frustrated and anxious. Remember, many of your employees may be expecting significant returns. If you fail to send out tax forms in a timely matter, you’ll be delaying that refund.
  • Failing to Keep Complete Records: The Fair Labor Standards Act (FLSA) requires that employers keep three year’s worth of payroll records. The law requires that these records include number of hours worked, pay rates, payroll processing dates, and other key information. In order to protect your company from potential fines and lawsuits, be sure that your payroll recordkeeping practices are functioning properly. Also, be sure to check the local payroll recordkeeping laws where your business is headquartered. Some states require that records be kept for over three years.
  • Missing Key Payroll Deadlines: Processing payroll is a highly time-sensitive matter and issues with updating entries, working with banks, and more, can cause unexpected delays. Processing payroll just one day late could cause extreme financial issues for your employees, especially for those who are living paycheck to paycheck. Many startups believe they have a concrete plan for ensuring payroll is processed on time each cycle, but they often aren’t prepared for unexpected or irregular issues that come up.
  • Failing to Accurately Calculate Pay: The final common payroll mistake that we’ll address in this post is perhaps the most significant. Accurately calculating payroll is more complicated than simply multiplying an employee’s hourly rate by the number of hours they worked. When you factor in overtime, commissions, deductions, and PTO, calculating the gross pay for an employee suddenly becomes very complicated. Nothing will make your employees lose confidence in your company faster than receiving an inaccurate paycheck. Work with your whomever on your team is tasked with payroll to make sure all payroll systems and data entered are up to date. As we’ll discuss later in this post, you may even consider outsourcing your payroll to ensure accurate calculations and timely deposits.

How to Avoid Common Payroll Mistakes

There are a few steps that you can take to avoid making the common payroll mistakes we covered in the previous section:

  • Keep a simple checklist of payroll processes. Even though your payroll process should be largely automated with technology, you should still have a detailed checklist that you can use to make sure payroll is processed accurately each cycle.
  • Consider running certain reports prior to payroll processing. Running reports like a deductions summary, payroll register, and cash requirement is a great strategy to catch any preexisting errors before they pollute the payroll cycle.
  • Don’t hold back when it comes to investing in payroll tools. Consult with your HR staff to determine if your payroll systems and technology are modern or out of date. Implementing the right Human Resources Information System (HRIS) for your business can easily make the difference between successful and unsuccessful payroll processing.
  • Make sure you fully understand what payroll is, especially if you don’t outsource your payroll. As a business leader, you should fully understand the payroll process from start to finish. If you can’t walk through the entire process in detail, don’t be surprised if you experience a payroll error sooner rather than later.

Outsourcing Payroll to Mitigate Payroll Risk

In order to avoid making costly payroll mistakes, consider outsourcing your payroll to an expert third party provider. Outsourced payroll providers are experts in all things payroll-related.

As a business owner, you constantly must worry about all aspects of your business. Marketing, finance, accounting, growth, investments, recruiting, onboarding, acquisitions, mergers, etc…the list could go on and on. Why add payroll—which is such a complex and crucially important task—to that list? Outsource your payroll so that you can focus on what matters most – growing your business! Hand off your payroll to a professional with years of experience avoiding and mitigating payroll risk.

Launchways is your trusted payroll partner. Get in touch with us about our payroll solutions today.

Key Takeaways

Some of the most common payroll mistakes are:

  • Misclassifying employees.
  • Failing to send tax forms.
  • Failing to keep complete records.
  • Missing key payroll deadlines.
  • Failing to accurately calculate pay.

To avoid these mistakes, consider doing the following:

  • Keep a simple checklist of payroll processes.
  • Run certain reports prior to payroll processing.
  • Don’t hold back when it comes to investing in payroll tools.
  • Make sure you fully understand what payroll is, especially if you don’t outsource your payroll.
  • Consider outsourcing your payroll to an expert payroll services provider.

The Simple Year-End Payroll Checklist You Need

Quarter four can be a stressful time of year for businesses. A particularly stressful quarter four responsibility is dealing with year-end payroll procedures. Here at Launchways, we understand year-end payroll procedures can be complex and time-consuming. That’s why we decided to put together a simplified payroll checklist to help you tackle year-end payroll like a pro.

Year-End Payroll Checklist*

 

1. Check employee and employer data:

  • Verify the employer and employee data that is used in processing your quarterly tax reports and W-2s. view the “Quarterly Tax Verification Letter” is the document which displays this critical data.
  • To which employees does the “retirement plan” indicator in Box 13 of Form W-2 apply?
  • Confirm that employee names and Social Security numbers are in the correct format.

2. Check wage, tax and benefits data:

  • Confirm that deferred compensation plan type is correct and verify employee contribution amounts.
  • Check that Group-Term Life Insurance adjustments have been updated and submitted.
  • Ensure that other special tax items have been updated and submitted, such as Other Compensation, Third-Party Sick Pay, Employee Business Expense Reimbursements, Taxable Fringe Benefits, Tip Allocation information, and Dependent Care Benefits.
  • Verify the employer state unemployment insurance tax rate and taxable wage limit for each state.
  • Compute uncollected Social Security and Medicare taxes for retirees and former employees.
  • Verify that withholding has been made properly, or withhold from the final paycheck for taxable fringe benefits. These may include:
    • Group-term life insurance in excess of $50,000
    • Third-party sick pay (is the third party issuing a W-2?)
    • Personal use of company vehicle
    • Non-qualified moving expense reimbursements
    • Company-provided transportation or parking
    • Employer-paid education not related to the employee’s job
    • Non-accountable business expense reimbursements or allowances
    • Bonuses
    • Non-cash payments

3. Check for special procedures:

  • Schedule any special bonus payrolls for the current year.
  • Request any special reports needed for year end.
  • Ensure adequate payroll supplies to complete the year and to begin the new year, including blank checks, payroll forms and blank Forms W-2.
  • Determine whether all adjustments are applied or that an adjustment payroll has been scheduled.
  • Remind employees to fill out a new Form W-4 if their situation has changed.
  • Obtain new Forms W-5 for Advance Earned Income Credit (EIC) for the new year.
  • Confirm that all “manual” checks written during the year have been accounted for and updated in the system.
  • Determine that all voided or reversed paychecks have been accounted for in the system.

*Please note: this checklist is meant to provide basic guidelines only. Payroll procedures and requirements will vary business to business.

Looking for extra payroll support? Launchways is here to help. Connect with a Launchways team member today to learn more about our payroll outsourcing solutions.

Everything You Need to Know about the New W-4 Form for 2019

The W-4 form is used by employers to withhold the proper amount of federal income taxes from employees’ paychecks. The Internal Revenue Service (IRS) recommends that employees submit a new W-4 every year or anytime their financial situation changes significantly. The IRS recently published a preliminary draft of the new W-4 form for 2019. The finalized version of the new W-4 form will likely come out by the end of the summer.

The recent federal tax overhaul significantly changed how individual income taxes are calculated. This directly effects the method for figuring out withholding, meaning employers needed an updated W-4 to ensure calculations would be correct. In an ideal world, if an employee follows the instructions on the W-4, it will determine a withholding amount close to their income tax liability. Although it’s not an exact science, the new W-9 form aims to closely mirror the new tax code so that employee withholdings will be accurate.

Major Tax Changes

Although the official final draft of the new W-9 form has yet to be released, the preliminary draft has several key withholding changes including:

  • Method of structuring withholding: the approach to withholding will change significantly, with more emphasis being put on individual income tax liability rather than the number of allowances.
  • Incremental tax rates: in the new W-4 form, it prompts the highest paying job in the household to disclose any additional family income, including tax credits individuals anticattle claiming.
  • Online aids: the IRS plans to offer an online withholding calculator for employees who don’t want to disclose their financial information to their employer or who have more complex tax situations.
  • New W-4s not required: the IRS plans to encourage the use of the W-4, but not mandate it. New withholding methods will be designed to be backwards compatible with previously filed W-4s.
  • New hires: employees who do not sign a W-4 as new hires will calculate withholding as though single, claiming no adjustments.
  • Detailed instructions: the IRS will provide a detailed instruction page to assist employees in filling out the new W-4.

What Should Employers Do

As an employer, you should take the following steps:

  • Wait on the final word from the IRS on the new withholding rules and W-4 form.
  • Support the new withholding methodologies and use the new W-4 form, even though it’s not required.
  • Ensure withholding are adjusted appropriately for employees who choose to complete a new W-4.
  • Stay alert for the finalized withholding structure and new W-4 form for 2019. Ensure your payroll system can support the requirements.
  • Make sure to double-check state tax code changes. Oftentimes when there is a major federal tax withholding change, states will have to decide how to adapt to the federal process.