5 Common Payroll Questions Your Employees Might Ask
It might seem like an obscure topic, but your employees probably have questions about their payroll. If you’re the one who handles payroll for your business, you know how easy it is for questions to come up. Whether you’ve hired a full-time accountant to address employee issues or you are the one answering all of the questions, here are common payroll questions that your employees might ask.
1. What’s the Difference Between Gross and Net Income?
Gross pay is the total of your employee’s paycheck before any deductions have been taken out. Some deductions are required by law, such as federal and state income tax, Social Security, and Medicare. Other deductions will be taken out of their paycheck at your discretion.
On the other hand, net pay is what your employee will take home after all deductions have been made from gross pay. Thus, net pay can vary from one check to the next, depending on how much they earn in each paycheck.
2. When are W-2s Available?
The IRS requires that W-2s be mailed to employees by January 31st or later, the next normal payroll cycle ending in or after January. If an employee quits or is terminated before January 31st, they can pick up a copy of the W-2 at their former employer’s business location.
3. Why is My Take-Home Pay Different Than My Annual Salary?
The amount of taxes employees pays on their salary each year may differ from the amount withheld from every paycheck. The tax-withholding amounts are calculated based on information provided to you by the Internal Revenue Service (IRS) and the state revenue department.
A final paycheck is an employer’s way of distributing final income to an employee who has quit or been fired or otherwise separated from employment with the company. It’s usually a combination of the balance of any banked time and unused vacation time, plus any remaining payroll deductions.
4. What Do the Withholdings on My Paycheck Mean?
As an employer you use withholdings to ensure that your employees pay the required taxes throughout the year. Without withholdings, employees would have to wait until tax time to settle up with their taxes.
5. If Payday is on a Holiday, When Do I Get Paid?
Payday is always on the same day of the week, not on holiday. For example, if employee payday is on Friday, it will always be on Friday. If a holiday falls on a Friday, their payday will be moved to the next workday, which does not fall on the holiday. Suppose a payday is moved due to a holiday, then the checks for that payday are issued on the next workday following the holiday.
Payroll Questions: Conclusion
Overall, the purpose of this post is to give you a good understanding of your responsibilities as an employer and for you to develop a solid plan for your business. Being proactive about your payroll taxes and communicating clearly with your employees makes it possible to keep everything running smoothly, both legally and from a moral standpoint. Contact our payroll experts here at Vision HR if you need assistance with your New Smyrna Beach business payroll.
