As a small business owner, we know you have certain responsibilities. A whole bunch of them, we’d wager. You know how important it is to get your duties taken care of and to hit your deadlines. And as a small business owner, there are a few deadlines you really can’t afford to miss. Here are three items you’ll definitely want to make sure you’ve got on your calendar.
1) 401(k) deposits for your employees
If you sponsor a 401(k) plan for your employees, it’s up to you to make sure any employee withholdings make it into their account. There are some pretty strict yet vague rules about the timing of these deposits. The general rule is to make these deposits as soon as possible after you’ve withheld contributions from your employees’ wages. The deposits must be made in a timely manner, though there’s no definition of what qualifies as “timely.”
Some small business owners think they have until the 15th of the month to make these deposits, but you shouldn’t rely on that rule. The 15th of the month is the absolute limit on when these deposits can be made, so it isn’t a good idea to routinely make them that late.
And if you do make deposits late, you could get yourself into trouble. Not only can you face penalties for being late, you may also have to pay an excise tax. You could even end up having your business disqualified from the 401(k) altogether. So, always make sure you deposit your employees’ deposits quickly!
2) Payroll taxes
You’ll also want to make sure your payroll taxes are taken care of in a timely fashion. Some payroll taxes are a bit easier to plan out. This includes your federal income tax, Social Security tax, and Medicare tax. These can be deposited monthly or semiweekly. You can’t create your own schedule here, and you must adhere to one of these two deadlines.
You also need to watch out for your FUTA taxes. FUTA (or Federal Unemployment Tax Act) taxes fund federal unemployment programs. These taxes are solely your responsibility as the employer. No withholdings are taken from employee wages for FUTA.
FUTA taxes are due quarterly, but you don’t have to make deposits until you hit a $500 liability. If your tax liability is under $500, you aren’t required to make a deposit. Instead, your liability rolls to the next quarter.
If your liability does cross over $500, you’ll need to make your tax deposit by the last day of the month following the end of a quarter. In other words, if your FUTA liability is only $400 in March, your liability rolls over to the next quarter, which ends in June. If your liability has reached over $500 in June, you’ll have until July 31st to make your deposits.
3) Qualifying life events
Qualifying life events are very important to your employees, not only for the emotional aspects they bring, but for their status as triggering events. You can’t schedule a qualifying life event for your employees, so when they occur, you’ll need to know what to do and when.
A qualifying life event triggers a change in your employees’ payroll records and benefits. This includes:
- The death of a spouse
- The birth or adoption of a child
- Change in employment status (such as termination or promotion)
- Loss of insurance coverage
- A dependent becomes ineligible (due to age or student status)
Changes like these can bring on several changes for your employees, both in their personal lives and in the office. At work, it can affect their access to:
- Dental insurance
- Vision coverage
- Disability insurance
- Life insurance
- Access to retirement plans
You’ll want to know what procedures to follow if an employee has a qualifying life event, and which benefits will need updating.
Keep in mind that employees can usually only apply for a new healthcare plan during an open enrollment period. This is a designated period of time during the year when plans accept new members. A qualifying life event allows an employee to change their healthcare plan outside of an open enrollment window. Knowing when open enrollment is will still be beneficial for you, but also understand that changes can happen outside this timeslot under the right circumstances.
There’s a lot to keep track of when you’re running a small business. Small business payroll can feel like a full-time job on its own with all its deadlines and special rules. If you’ve ever felt overwhelmed by the payroll portion of your job, or even if you’re just not interested in keeping all these dates on your calendar, you may want to consider outsourcing this part of your job to payroll professionals. We at Palmetto Payroll Solutions know you have a ton of responsibilities as a business owner, and we’d be proud to help you manage this aspect of your business.