Tips to avoid Payroll and Tax corrections
Learn about the different tips to avoid payroll and tax corrections.
To help you understand Zenefits Payroll, we ’ve put together key information containing important payroll and tax tips.
CONFIRM TAX INFORMATION
During your Zenefits journey, it is important to ensure your tax information is up to date. Below are some common mistakes and how to avoid them:
- Incorrect tax rate in SUTA Accounts: New rates are typically sent out at the end of November through December. As those new rates are provided, administrators should update/confirm their rates for the new year.
- Incorrect tax deposit schedule within tax cards: Tax deposit schedules can change as a company grows. Companies will receive notices by mail or portal for a change in deposit schedules. Typically, this happens at the beginning of the year but could change at any time a company meets monthly filing or payment requirements. Administrators should update their tax deposit schedule as soon as a notice is received.
- Incorrect number (or format) in tax cards: Utilizing the State Payroll Tax & Registration Guides provides information to administrators on correct formatting of state tax jurisdictions.
- Employees assigned to incorrect work locations: The accuracy of an employee’s home and work location is essential to accurate tax filings. Wrongly allocating employees to avoid new state set-ups, or to postpone set-up for a new tax jurisdiction result in inaccurate filings and costly corrections. View the Zeneskills training on Work locations and their effect on payroll
- Calculate Only vs Full-Service: Zenefits offers two levels of service when it comes to your taxes, and it is important to understand the differences between the two.
- Calculate Only: Zenefits will calculate any employee/employer taxes related to a jurisdiction and display this amount in your quarterly tax package. Zenefits will not withdraw funds for the calculated taxes, remit the calculated tax amounts, file tax returns, or resolve notices for the respective tax agency. Companies are responsible for tax payments while pending full-service. Once they receive confirmation, they are full-service, Zenefits will begin to debit for taxes. Payruns will have two debits: one for wages and secondary for tax.
- Full-Service: Once a company is in full-service, Zenefits will calculate, collect, remit and file taxes for the appropriate jurisdictions. Company administrators should ensure accurate rates, filing frequency, and account numbers are updated as needed.
- Managing Benefits Costs for S-Corp Owners: One of the most common end of year corrections on W-2s is when S Corp shareholders who own more than 2% have not allocated their benefit contributions as income. These shareholders must have their benefits taxed and therefore will need their own pay type. If an S-Corp with 2% or more shareholders need guidance they can utilize the help center article linked or reach out to the Zenefits tax team, Advisory Services (if included on their account), or their internal tax advisor.