1. 10 Most Common Payroll Pitfalls Tracie M. Sawade, CPP Technical Consultant Ultimate Software

2. Biography  Certified Payroll Professional since 1996  Former Member of APA’s National Speakers Bureau and Current Member Hotline Referral Committee  Former President of the Denver Chapter Payroll Association  Presented at APA’s Congress and Chapter Leadership Seminars, Rocky Mountain Regional and Texas Payroll Conference, Indiana Statewide and Chicago, Denver and Minneapolis Chapters

3. Please Complete Your Evaluation at the End of the Workshop Agenda  Mistakes Happen  Common Blunders  Minimizing Them  Let’s get started…

4. Voids and Reversals  Voids  Impact Quarter/year end GL and bank accounts  Reversals and adjustments

5. Voids/Reversals Recommendations  Process voids promptly  Track and compare  Supplemental payrolls Posting transactions  Validate NO NEGATIVE WAGES

6. Deductions and Earnings  Incorrect taxation  Impacts Employee/Organization  Deductions  Earnings Taxable Fringe Benefits

7.  What is a taxable fringe benefit? Examples  Imputed earnings Group Term Life  Costs

9. Deductions and Earnings - The Fix  Research proper taxation FIT/SIT/FUTA www.IRS.org W-2 vs. 1099 What box? o W-2 Instructions Publications 15 and 15-B

10. The Fix Continued  Verify set up on system  Test, test, test  Process promptly  Save Your Company Money by Doing it Right the First Time

11. State/Local Taxes  Employees who move Did they forget to tell you?  Reciprocal agreements  Correct reporting  Costs Audits and amendments

12. State Taxes – What to do  Verify correct set up APA’s Guide to State Payrolls BNA, CCH, State sites  Employees who move Timing/Checklist Quarterly reminders  Validating with reports SUI

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14. Wage and Tax Details

15. Year-end Preparation  Waiting too long  No checklist  Compliance  Lack of testing  Not enough time for critical tasks

16. Year-end - The Master Plan  Start early Have you started yet?  Create a plan/checklist  Create a team  Where you can find help APA’s Year-end course Vendors/local chapters

17. Year-end Reconciliation  Waiting compounds issues  W-2 totals <> 941 totals  Too much going on in Q4

18. Reconciliation – The Key  Create spreadsheet Taxable wages Taxes that can be manually calculated  Collect data each payroll/month  Early detection  Pay attention to warning signs

19. Compliance – It Matters!  Challenges Healthcare Reform Hard to interpret  Potential costs Audits Fines and penalties  Recommendations

20. Intercompany Transfers  Multiple companies  Acquisitions/Successor  When do taxes start over?  Tracking/verifying YTD  Costs W-2cs, amendments Audits, penalties

21. Things to Remember  Understand wages and taxes SS/SUI/FUTA – start over  Tax details  Deductions - YTD

22. System Improvements  ESS/MSS  Workflow – what is it?  Change management  Dos and don’ts  Potential savings

23. Steps to Take  Recommendations What do you do today? Does it make sense? Process maps

24. Successful Implementation  Key to Success Have a plan Communication  Change management/training Manager/employee training Gaining user acceptance

25. GL Reporting  Challenges New earnings, deductions and taxes Structural changes Acquisitions  Costs Time, corrections, labor allocations Recommendations…

26. Regular Rate and Overtime  Common misconceptions  Does it really make a difference?  Have to pay OT on extra earnings  For some companies makes no difference But for others it does!

27. Regular Rate and FLSA OT  Regular Rate of Pay  Based on what?  All earnings to be included Regular, regular overtime, commission, non-discretionary bonuses, premiums  Add all earnings and divide by total hours

28. Overtime Example  Reg. Rate = $10/hour/OT Rate = $15  Hours = 40 regular, 10 overtime  Other earnings = $500  40 * 10 = $400 + 10 * 15 = $150 + $500 = $1050  Right?

29. FLSA OT – The Right Way  Rate = $10, 40 regular, 10 overtime, $500 other earnings  50 * 10 = $500 + $500 = $1000  $1000/50 hours = $20/hour (reg. rate) *.5 = $10/hour (OT rate); $10 * 10 = $100  $500 + $500 + $100 = $1100

30. Wrapping It Up Rolling the dice Pay Now or Pay Later Questions?

31. For More Information  American Payroll Association (Links > State) http:// www.americanpayroll.orgwww.americanpayroll.org  US Department of Labor http://www.dol.gov http://www.dol.gov  Internal Revenue Service http://www.irs.govhttp://www.irs.gov  Social Security Administration http://www.ssa.org http://www.ssa.org