With rising minimum wages, and a focus on staying profitable while reducing costs, companies are looking for ways to improve their operations around Payroll Management. This means that, by properly reporting payroll, aligning work schedules to reduce overtime, and avoiding compliance pitfalls, you can maximize your profit while keeping costs at a minimum.
At the same time, one thing companies aren’t always aware of is the ability to take advantage of government programs that provide your workforce management system with incentives to get money back for your operations. This is a great area to get more value out of your workforce and get money back. Let’s take a look at both.
1. Payroll Management intelligence in Deductions
Payroll management can be a complex process. There are various elements that are tied to payroll management, which can vary from one employee to the next. Risks arise when you have to manually calculate wages against hours worked, the necessary deductions required for taxes, benefits and additional wages (such as 401K). Any wages, tip credits, taxes, benefits deductions and overtime need to be calculated properly, in order to maintain regulatory compliance.
Look for a payroll management solution that provides that level of integration and gives you the ability to connect time and labor management with payroll management. Without having a system that connects the employee rates to the payroll, you run the risk of errors or failed entry of wages. This not only poses a risk to employees’ getting paid but can also run into compliance risks with failure to accurately record taxes or benefits. You want a system that provides you with the intelligent business rules to automatically run payroll against the current employee rates.
The Savings: The biggest challenge becomes being able to accurately track the employee wage rates, taxes, and credits that need to be accounted for. Minimum wage changes, or properly calculating tip credits, overtime, and how this is taxed can be a complex process, and noncompliance to this can result in costs associated with time to process or failure to record wages properly, which can result in penalties you cannot afford.
2. Visibility into Benefits and Available Credits
Part of streamlining costs is assessing the potential workforce management credits available to businesses and taking advantage of benefits that can help reduce costs. Understanding the eligibility of certain government tax credits such as the Work Opportunity Tax Credit (WOTC) or Employee meal credits can allow you to get money back on certain hires.
Additionally, having a Benefits Management System that is integrated into your payroll management system helps you to provide an assortment of benefits options to your employees that allows you to reduce your overall costs when paying for benefits management administration. You want to look for a solution that has these options as a service for you to take advantage of and many it easy for you to process them and apply them to your business.
The Savings: WOTC credits for eligible employees can vary from $2000 for a small operation to well over $50,000 for larger operations. Similarly, meal credits for employees are 50% tax deductible for each meal. These are significant credits that can be easily integrated into your system and helps to offset any costs within your operations. The biggest challenge in implementing them is simply knowing when and how you can apply them. By having a workforce management solution that makes these advantages more visible to your operations, you can take the administrative burden off researching and processing, and have the solution help you to realize these potential costs.
As rates change and more and more companies are looking to remain competitive with both their operations and their workforce, there needs to be a shift in how the workforce management system is able to assist in mitigating risk. Leveraging workforce management systems, such as payroll management tied to time and labor management, linking benefits management to your workforce management system, and taking advantage of government tax credits, you can save costs, retain your workforce, and streamline operations.