Payroll

Social Security rate stays at 4.2%–likely through ’12

01/31/2012

In December, a last-minute congressional vote allowed the year-long 4.2% employee Social Security tax rate to remain at least through Feb. 29. But if congressional negotiations break down, be aware that the rate could jump back to 6.2%.

Start your engines! Mileage rate at 55.5 cents a mile

01/30/2012

The standard mileage rate, which employers may use to reimburse employees who drive their own cars on business, remains 55.5 cents a mile for 2012. You can also use the standard mileage rate to value employees’ personal use of moderately priced company cars.

IRS tells how to make bonuses tax deductible for employers

01/25/2012

The IRS has clarified that employers can take a current-year tax deduction for a fixed amount of bonuses that will be paid to employees during the following year, even though the amount that each employee will receive, and even the identity of employees, aren’t known until after the tax year ends.

ACH fraud is Payroll’s newest headache

01/17/2012

You couldn’t have direct deposit or online banking without the Automated Clearing House (ACH) network. Unfortunately, online banking through the ACH network has generated a new cyber crime—ACH fraud. Payroll, which uses the ACH network for direct deposits and other transactions, is particularly vulnerable.

Help employees handle their federal income taxes

01/12/2012

Comp and benefits pros have three ways to make tax time easier on employees this spring. Work with your colleagues in payroll and accounting to publicize these conveniences—and protect workers from fraud.

We interrupt your perfectly good day for year-end anxiety

01/03/2012

Payroll doesn’t have time to shake off any lingering holiday blues, since it’s down-to-the-wire time for W-2s. Here are two tax questions about gift cards and staff discounts:

IRS loosens de minimis deposit rules, sets 944 filing rules

01/02/2012

Under the de minimis deposit safe harbor rule, employers that accumulate less than $2,500 in payroll taxes during the current calendar quarter can pay those taxes with their Form 941, rather than deposit them. Final regulations allow quarterly filers to use the safe harbor rule if their accumulated taxes for the current or preceding quarter are less than $2,500.

Bonuses: You paid them, now when can you deduct them?

01/02/2012

If you use an accrual method of accounting and allocate money to a bonus pool, you can breathe a sigh of tax deductible relief. The IRS has concluded that employers can take a current tax deduction for a fixed amount of bonuses that will be paid to employees during the next year.

Final MLR regs raise ERISA, Payroll questions

01/01/2012

Final medical loss ratio (MLR) regulations, which took effect Jan. 1, 2012, require group health insurers to spend between 80 and 85 cents of every premium dollar on medical care and health care quality improvement. Insurers that fall short must make rebates to participants, beginning Aug. 1, 2012.

4.2% employee Social Security rate extended through February 2012

12/31/2011

After weeks of wrangling, the House of Representatives and the Senate on Dec. 23, 2011 agreed to extend a 2 percentage point payroll tax cut for two months to buy time for talks on a full-year renewal. President Obama immediately signed the bill into law. The vote removes employer uncertainly about how to handle payroll withholding starting Jan. 1, 2012.