As a payroll professional in the construction industry, your role demands precision and foresight whenever the calendar resets. From reviewing employee information to updating payroll systems and complying with new tax regulations, getting your payroll department prepared for a new year is a big deal.
At ConstructionPayroll.com, we’re here to help you give your team a seamless start to any new year with proven payroll tactics that have consistently delivered positive results.
Watch the IRS
IRS tax laws are nothing to ignore. Signing up for their newsletter will help you keep pace with federal, state, and local tax updates, which often undergo alterations as the year begins. Resources like the Internal Revenue Service (IRS) website offer a wealth of information on new tax laws, rates, and regulations. Stay vigilant for updates concerning essential forms such as W-4, pivotal in recalculating withholding amounts.
Fortunately, navigating the IRS site makes reviewing the latest forms you need to kick off your fiscal year easy.
So, even though the feds have their eye on your actions, you can always stay ahead with your research.
Prepare Annual Reporting with Construction-Specific Forms
Beyond W-2 and 1099 forms, payroll professionals in the construction industry might encounter forms like Form 941 and Form 943, depending on the nuances of their business. These additional forms necessitate accuracy and timely distribution.
If you’re unfamiliar with what these forms are, let’s dig into the important details.
Most employers use Form 941 to report payroll taxes, including federal income tax withheld, Social Security tax, and Medicare tax. It is filed quarterly and ensures that the IRS is informed about the taxes withheld from employee paychecks and the employer’s portion of Social Security and Medicare taxes.Timely filing of Form 941 keeps your business compliant with federal tax obligations and avoids penalties.
Form 943 is similar to Form 941 but is used by agricultural employers. It reports federal income tax withheld, Social Security tax, and Medicare tax from farm workers’ wages. Form 943 isn’t filed quarterly but annually. Agricultural employers must file this form to report the correct amounts of taxes withheld and paid.
If you’re curious about the latest instructions and deadlines for these important forms, the IRS website has the information you need.
Update Employee Records
Who says you have to wait until spring to do some cleaning? At the beginning of the year, employee records need meticulous attention. Promptly incorporate changes such as staffing adjustments, salary revisions, promotions, terminations, or modifications in benefits into payroll records.
Adding updated employee records to your annual payroll assessment helps keep your records accurate and your payroll in compliance with current tax filings. Updating these records keeps Social Security numbers, addresses, and filing statuses up-to-date and free of errors in reporting and filing your taxes.
More importantly, accurate records minimize the risk of penalties, audits, and discrepancies with the IRS.
Review Benefit Plans and Deductions
Confirm any alterations or renewals in employee benefits, retirement plans, healthcare contributions, and other deductions. Be sure to communicate clearly to employees ahead of changes to avoid concern and anxiety.
To effectively communicate benefit changes to employees, a multi-channel approach must be used to get important information out to everyone clearly and promptly.
An email blast is a quick and efficient way to hash out the details to all employees simultaneously, allowing them to review the changes at their convenience. For more personal or impactful communication, sending a printed and mailed letter can reinforce the message, particularly for employees who may prefer physical documents or for essential changes that require their immediate attention.
If you really want to convey the importance of changes, hosting a company-wide all-hands announcement meeting provides an opportunity to explain the changes in detail, answer questions in real time, and emphasize their importance.
This combination of digital, physical, and face-to-face communication allows employers to support and inform employees about essential benefit changes.
Double Check Compliance
For compliance updates specific to the construction industry, turn to resources like the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA).
Industry-specific associations such as the Associated General Contractors of America may also provide tailored guidelines for compliance in the construction sector.
You should double-check key areas of compliance, such as worker safety, wage regulations, and tax reporting. Non-compliance can result in penalties.
Test and Update Payroll Systems
Regularly test payroll systems for compliance and accuracy. Software vendors often release updates in line with new tax laws and regulations. Refer to their websites or support channels for guidance on updating systems effectively.
If you’re finding compliance errors in payroll, employee complaints are rising, or payroll is just taking too long to complete, these are all signs of an out-of-date system. Take the proper steps every year to schedule regular checks or quarterly reviews to ensure that your systems are up to date.
Ready to take control of your construction company’s payroll? Take the first step toward an updated construction payroll service by utilizing our free payroll assessment. We’ll take a brief look at the efficiency and effectiveness of your current payroll system to help set you up for success in the new year.