Medlin Software
Payroll Software by Medlin is an easy-to-use tool that makes handling your payroll processing as simple as possible. By managing your data, handling the calculations, and generating reports, your payroll processing time is measured in minutes instead of hours.
On this page are items that come up often. Even if there's nothing new to you here, it's worth revisiting these at least once a year. If you have any concerns about the payroll regulations that apply to you, contact a local payroll expert who can give specific advice for your situation! Ask questions and get answers BEFORE you start, and before implementing something new — rather than at year-end when you have to prepare the year-end reports.
Print or obtain a copy of the current IRS Employer's Tax Guide, IRS Publication 15, plus your current state and local employer/payroll guide books, and keep them on your desk. In January, review the "What's New?" chapter covering any changes from the previous year. These booklets explain the payroll process about as simply as possible, and should be the first place you turn for answers.
Use any search engine to find yours. Try searching for "(your state name here) payroll tax agency." Using California as an example, you'll be directed to California's Employment Development Department. Look for email newsletters you can sign up for, news pages aimed at employers, and any other useful information the agency puts online.
If you have an employee earning near minimum wage, or working part time, their federal and state withholding really may be zero. If you're concerned, do a manual calculation (pen and paper) using the appropriate guide book and compare it to what Medlin Payroll Software calculates. You'll find Medlin's calculations are accurate.
Print and keep copies of all government tax forms (and print receipts for everything filed electronically). Take a few minutes to review the federal and state record-retention requirements. You'll find you have to keep paper records for at least four years — time cards/sheets, tax forms, W-4 forms, I-9 forms, and so on. Being able to scan or store these electronically doesn't mean you can skip the paper. Paper records don't get lost when you switch computers, lose power, or take your computer to a service center.
The most common data-loss story we hear? Someone takes a computer to a service center for repair or to move data to a new computer. The service center hands the client some sort of "backup" — except it's not a backup the program can restore from, just a copy of files or some image the service center made. The "service" center then charges more, or (worse) is unwilling or unable to undo whatever "backup" they created. Medlin Software has built-in backup and restore functions — use them! With a program's built-in backup and restore, you can be sure you have a good backup, because the program's author knows exactly what to back up and restore. Also: keep a rotation of removable backup media, not just one you reuse over and over. Time spent backing up is cheap compared to time spent manually recreating lost data.
Keep a second set of backup media and a second set of paper records in a separate location. Why? Things happen unexpectedly. If something happens at the business location, you've got an alternate set of data to use. Be prepared for a natural disaster, an accident, or even a disgruntled employee destroying data. Our (2020) encrypted secure online backup feature is a good start.
We often hear about employers who clearly aren't in compliance with regulations. Sometimes it's a lack of knowledge, sometimes it's because "it was always done this way," sometimes just because they haven't been caught and penalized yet. Compliance penalties can be expensive.
There are rules about how often and when you must pay employees. Your state's employer guide book will have the details.
REMEMBER: owners who also receive a paycheck (an employee) MUST be paid using the same rules as any other employee. That includes at least minimum wage for all hours worked, overtime as required, and payment every payday. Owner/employees also have to mind "reasonable wage" requirements — making sure the owner/employee is paid a reasonable wage for the work they perform.
Most states have rules about providing pay stubs/receipts to employees, and some are very specific about what the stub must contain. In California, for example, not providing a proper pay receipt can cost you $100 per incorrect or missing receipt.
Do what you're required to do — nothing more, nothing less. Employers are subject to a large number of regulations. Be careful not to go "beyond" them, at least not without understanding the consequences. For instance, before making any deduction from a paycheck — even if the employee requests it — make certain it's allowed.
If an employee asks you to withhold more or less tax, remember your obligation is to withhold based only on the last valid W-4 form (and/or state-specific allowance form) the employee has given you. A request in any other form isn't valid. It's good practice to collect both a federal W-4 and the state equivalent (if applicable), and not to rely on the federal form to calculate state withholding.
See also: Electronic Reporting (eFile).
Questions? Email questions@medlin.com.