Growth Exchange
Payroll Responsibilities
Introduction
Board Responsibility
The IRS has the ability to go after individual officers, directors, or check signers who could have done
something about the payment of a liability.
Board members can face personal liability for employment taxes of an organization.
Directors and Officers insurance does not always cover this risk.
‐Forbes, 2019
Payroll Set Up
Process:
- Payroll Periods
- Policies
- Tax ID numbers
- Each State
Compliance:
- Registration with Federal, State and Local
authorities - Choosing a reputable payroll processing platform
- Display State posters
Executive (or designee) Responsibility
Understand payroll
Understand payroll schedule
Understand benefits
Know staff compensation
Know staff hours
Have written policies
Adhere to written policies
Review each payroll and ask questions
Policies
- Create consistency
- Ensure equity
- Draft
- Approval
- Review
- Frequency of payroll
- Time period pay date covers
- Timesheet and tracking
- PTO and sick
- Holidays
- Timing of approval and submission
- Method of payment
- Initial and final checks
- Expense reimbursement
Taxes & Compliance
Process:
- Know the taxes that need to be paid
- Ensure what you think is happening is
- Have the ability to check
Compliance:
- Tax ID numbers
- Know states you should be filing and the frequency of filing
- Are there city tax requirements?
- Workers compensation
- What other federal and state compliance is your organization required to follow?
Payroll Tools
Process:
- Payroll Platform
- Check List
- Organizing documentation and back up
- Reporting and managing time
- Requesting and approving Time Off
Compliance:
- Internal Control
- Secure exchange of information
- Taxes and deductions
- Access to payment methods outside of payroll platform
New Employees
Process:
- Onboarding/Orientation
- First day
- Ensure set up for payroll
- Timeline for benefits
- Information to payroll processor
- I‐9 completed
Compliance:
- I9 and withholding
- New Hire Reporting
- Direct Deposit information
- Pro‐rated first paycheck
- Documentation of wages
- Exempt vs non‐exempt
- Timing of benefits (if any)
Termination of Employee
Process:
- Determine last day
- Calculate PTO that may need to be paid
- Calculate last pay amount
- Inform payroll processor
- Inform benefit provider
Compliance:
- Pro‐rata payment?
- Allocation of benefit deduction, if any
- Removal from payroll processing platfom
Compensation & Bonuses
Process:
- Understand the market and setting compensation
- Annual increases
- One time project compensation
- Bonuses & gifts
- Understand the consequences
Compliance:
- Assessing and documenting comparable
- Taxes & reporting
- Using your payroll platform for to track anything related to staff compensation
- Hidden “compensation” issues
Benefits
Process:
- Understand the options
- Know your resources
- Track what team members are enrolled in
- Monitor changes
Compliance:
- Know the rules
- Retirement
- Health
- Life and other supplemental insurance
- PTO
- Taxable fringe benefits
Review
Process:
- Create a process for review
- Pay close attention to hourly, new employees, and terminating employees
- Take more time when there are pay or benefits changes
- Compare against previous payrolls
- Ask questions!
Compliance:
- Training on review and what to look for
- Observe a payroll preparation
- Ask questions
- Document your review and approval
- Remember, review your own processes and procedures for efficiencies and risk management
New Calendar Year
Process:
- Tracking compensation changes
- Changes in PTO
- Benefits changes
- Take more time
- Review closely
Compliance:
- Unemployment rate?
- Change in filing frequency
- Benefit renewals
- Review employee withholdings
- PTO, sick and other benefits roll over
- Review filed forms for prior year
- Archive forms according to document retention policy
Structuring the Plan
- Board
- Staff
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