Payroll Deductions: Tips on Managing Deductions with Payroll Software
Red Wing, Minnesota (PRWEB) February 10, 2015 -- Many aspects of payroll management are complex, not the least of which are managing payroll deductions. While the concept is easy to understand, the actual calculation of payroll deductions can be complex, and special care must be taken to ensure deductions are made, and the payments from those deductions are submitted in a timely manner to the proper agency. These are three tips on using payroll software to manage voluntary payroll deductions.
"Every business owner knows that providing employee payroll checks with the correct pay amount, associated taxes and deductions is very important," says Mark Machtemes,Red Wing Software Business Development Manager. "While calculating certain deduction amounts is straightforward, other deductions like garnishments and retirement plans that include employee deductions and matching employer contributions can be quite complex to calculate. Having to calculate those numbers manually takes additional staff resources and adds to the potential of incorrect numbers. That's why it's best to set up that information and have your payroll system do the work for you."
Calculate and pay wage garnishments within the payroll system.
Processing wage garnishments correctly is imperative, since processing them incorrectly can result in legal repercussions. Many garnishment court orders contain complex calculations, a percentage or a flat amount, and must be deducted from the employee’s pay. They may also include the requirement that the employee’s pay not go below a certain amount. The process becomes even more complex if that employee has multiple garnishments. Instead of managing the whole process manually, use a payroll system to set up and track garnishments in the system. Set up and pay garnishment creditors directly from the payroll system, so you can always go back and run reports to see who has been paid and how much. Set up garnishment priorities, so the system will accurately calculate garnishments in the correct order, and the proper amount is deducted for each creditor. Using the payroll software to handle deductions can greatly reduce the agony of having to manage them by hand.
Show deduction information on employee pay stubs.
Showing employee deduction information on pay stubs can reduce questions and keep employees happy. An additional benefit is that employers can show employees how much is being contributed by the company for benefits received. Without showing this information, employees may not be aware of these additional benefits, and their monetary value, that are being contributed by the company.
Automate your 401K Tracking.
Tracking 401K information within the payroll system can save significant time and keep that information organized. Set up 401K percentages in the system, and have that amount deducted automatically from employee pay. Go a step further and make the liability payment right from the system. If the 401K calculations are complex, such as employer matching of employee contribution from 1-3%, and a 50% match from 4-5%, the payroll system may be able to handle those calculations as well. Payroll system vendors can usually provide assistance if needed.
Using the payroll system to manage payroll deductions can make payroll processing much easier, and it can also help ensure the right amount is deducted, and vendor liabilities are paid correctly.
Red Wing Software, Inc., along with its nationwide network of business partners, offers industry-leading service, as well as training, on-site installation and implementation of the software. Their vision is “Creating the best management software experience”.
Red Wing Software, Inc. develops, integrates and supports the accounting and financial management needs of small- to mid-sized businesses, YMCAs, agribusinesses, Non profits, and municipals across North America. For more information on Red Wing Software products, including TurningPoint Accounting, CenterPoint Accounting, CenterPoint Accounting for Agriculture, CenterPoint Fund Accounting, CenterPoint Payroll, call 1-800-732-9464 or visit http://www.redwingsoftware.com.
Stephanie Elsen, Red Wing Software Inc, https://www.redwingsoftware.com, +1 6513881106 Ext: 209, [email protected]
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