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 importantthis 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
