The Payroll Book: A Guide for Small Businesses and Startups

The Payroll Book is the only book that demystifies payroll with clear, concise, and real-world examples on how to tackle the process. "The Payroll Book will be a valuable resource for the small business owner as well as for the entrepreneur planning a new venture. Thorough, well-organized, and thoughtfully written, this practical guide is an essential tool for managing the payroll process." —Marilyn K. Wiley, Dean, College of Business, University of North Texas "Failing to comply with the withholding, tax remittance, and report filing requirements in handling business payroll carries a high cost. Charles' book will guide entrepreneurs through the minefields of payroll processing and reporting in language that business owners can understand. Whether you already own or are planning to start your own business, The Payroll Book is an essential tool." —James A. Smith, Past President and Chairman, Texas Society of CPAs "If accounting is something you have not paid keen attention to in your startup, then this book can demystify the whole thing for you and then some! Logically set-up and highly practical in its approach! I highly recommend this book for any startup, entrepreneur, and, frankly, anyone thinking about starting a business. That said, if you already started a business it's just as important—this is a must-read!" —Hubert Zajicek, CEO, Co-founder and Partner, Health Wildcatters "Wow! This is the most comprehensive book of its kind. I have worked in payroll for over 25 years, and I would recommend this book as a reference to anyone who has a hand in payroll. From the novice just entering the field to the seasoned veteran, there is something in this book for everyone." —Romeo Chicco, President, PayMaster

Table of Contents:
Preface ix How to Use this Book ix Icons Used x Part I: Payroll Setup Chapter 1: Business Entity 3 Corporation 3 Partnership 5 Sole Proprietorship 6 Limited Liability Company (LLC) 7 Chapter 2: Employees and Nonemployees 9 You 9 Family Members 9 Employees Versus Independent Contractors 12 Statutory Employees and Statutory Nonemployees 19 Children 21 Volunteers 21 Interns 22 Religious Workers 24 Chapter 3: Earnings 25 Salary 25 Executive Exemption 33 Administrative Exemption 33 Professional Exemption 34 Highly Compensated Employees 36 Additional Guidance 37 When an Employer May Make Deductions from Salary Payroll 37 Hourly Wage 38 Basic Provisions/Requirements 39 Piecework 51 Training Wage 51 Subminimum Wage Provisions 53 Other Payroll Categories 54 Chapter 4: Deductions 63 Voluntary Deductions 63 Involuntary Deductions 68 Pre-tax Deductions 87 Chapter 5: Taxes 95 Tax Numbers 96 Employee Taxes 97 Chapter 6: Tax Penalties 123 Chapter 7: Workweek, Pay Period, Payday 129 Workweek 129 Pay Frequency (Pay Period) 130 Payday 131 Chapter 8: The Law 133 Federal 133 FMLA (Family Medical Leave Act) 140 Affordable Care Act 145 New Hire Reporting 146 Labor Posters 151 Davis-Bacon and Walsh-Healy 155 The Equal Pay Act (EPA) 156 Part II: Running a Payroll Chapter 9: Collecting Time 161 Time Clocks 161 Timesheets 165 Salaried Employees’ Time 165 Chapter 10: Calculating Payroll 167 Calculate Earnings Hourly 167 Overtime If a Staff Member Works Different Positions at Different Rates 169 Additions to Earnings 170 Reductions to Earnings 171 Chapter 11: Paying Your Employee 177 Method of Payment 177 Wages for Deceased Employees 184 Chapter 12: Taxes Depositing and Filing 187 Part III: Additional Essential Components Chapter 13: Record keeping 191 Internal Revenue Service 192 Department of Labor 192 Family and Medical Leave Act (If You Have 50 Employees or More) 193 Title VII of the Civil Rights Act of 1964 and the Americans with Disability Act of 1990 193 The Age Discrimination in Employment Act of 1967 194 The Immigration Reform and Control Act 194 Payroll and Direct Deposit Records in General 195 Employee Handbook/Policy Manual 195 Medical Insurance 195 Chapter 14: Workers’ Compensation Insurance 197 What is Workers’ Compensation Insurance? 197 Monopolistic States versus Nonmonopolistic Workers’ Comp States 200 Cost of Workers’ Comp Coverage 200 Chapter 15: Payroll Security and Internal Controls 207 Manuals and Procedures 207 Who Are You Hiring? 209 Internal Controls 219 Disaster Recovery 221 Form 944 222 Chapter 16: US Citizens Abroad, Resident and Nonresident Aliens, and Illegal Aliens 223 Nonresident Alien Services Performed Outside the United States 224 Paying Nonresident Aliens Inside the United States 224 Exceptions to Mandatory Withholding of FIT on Nonresident Aliens 226 Paying Illegal Aliens 226 Chapter 17: Other Issues 231 Professional Employer Organization (PEO) 231 Human Resource Management or HR 235 Escheat 235 Technology/Outsourcing 237 Federal Laws Based on the Number of Employees 238 The Employee Handbook/Policy Manual 242 Conclusion 251 Appendix: Payroll Tax Calender 253 Glossary 255 Index 285  

About the Author :
CHARLES J. READ, CPA, has over 40 years of experience in the payroll industry and is the founder of Custom Payroll Associates and GetPayroll. He is a US Tax Court Practitioner, member of the IRS Advisory Council and a United States Marine Corp veteran.