Did you land on this page because you’ve already been fined payroll penalties and are looking for ways to avoid it in the future? Whether your answer is “yes” or “‘no”, the information you’re about to read here can save you a great deal of unnecessary payroll-related expenses in the years to come.
Payroll penalties are normally caused by not filing on time, not filing correctly, failing to deposit withholdings, or depositing the wrong amount.
The solution sounds pretty simple: You avoid those and you avoid payroll penalties.
But because of all the intricacies you’d have to deal with when processing payroll, that’s easier said than done. Many Temecula and Murrieta-based clients who come to us have these issues and, believe me, they found it very difficult to handle these issues by themselves.
Not only do they have to keep track of the numerous deductions and different tax laws in the local, state, and federal level, they also have to go through all the nitty-gritty stuff while running their business.
And because they have to juggle all these on an already very tight schedule using already overworked staff, payroll penalties are really just waiting to happen.
These penalties can be very heavy. For example, penalties like the Trust Fund Recovery Penalty (TFRP) can go as high as 100%. Employee taxes like Social Security, Medicare, as well as federal income taxes withheld are supposed to be held by employers “in trust” until they are due for forwarding to the IRS.
If you forward less than the required amount or, worse, fail to forward any amount at all, you could be held liable for unlawful retention. As a result, you’ll be compelled to pay the payroll penalty.
Hiring a payroll service can help you avoid these payroll penalties and therefore save hundreds or even thousands of dollars annually.