Payroll Compliance Checklist
Payroll compliance involves much more than paying employees on time. Businesses must comply with payroll tax regulations, employee classifications, payroll reporting, W-2 and 1099 requirements, state payroll laws, labor regulations, and accurate bookkeeping. This checklist helps small businesses review their payroll compliance process throughout the year.
What Is Payroll Compliance?
Payroll compliance means following federal, state, and local payroll requirements while maintaining accurate payroll records. It includes employee classification, payroll tax filings, wage reporting, direct deposit, payroll deductions, overtime calculations, payroll record retention, contractor reporting, and bookkeeping reconciliation. Payroll compliance is an ongoing process. Every payroll run creates legal, tax, and accounting responsibilities that should be reviewed regularly.
Payroll Compliance Checklist
Checklist:
Verify employee classifications- Verify contractor classifications
- Review overtime calculations
- Review minimum wage requirements
- Review payroll frequency
- Verify employee tax withholding
- Verify payroll tax deposits
- Review federal payroll filings
- Review state payroll filings
- Review unemployment tax filings
- Review local payroll taxes
- Verify benefit deductions
- Review retirement deductions
- Review garnishments
- Verify paid leave balances
- Review workers compensation reporting
- Verify direct deposit records
- Maintain payroll records
- Review payroll journals
- Reconcile payroll liabilities
- Reconcile payroll bank account
- Verify W-2 information
- Verify 1099 information
- Review payroll compliance calendar
- Confirm payroll matches bookkeeping
Federal Payroll Compliance
Review:
- Federal payroll tax deposits
- IRS payroll reporting
- Employee withholding
- Employer payroll taxes
- Federal unemployment taxes
- Quarterly payroll filings
- Annual payroll filings
- Payroll record retention
State Payroll Compliance
Review:
- State withholding taxes
- State unemployment taxes
- State payroll registrations
- Paid leave requirements
- State labor law updates
- State payroll filing deadlines
- State payroll reports
- State payroll notices
Employee Classification Review
Review:
- Employee versus contractor classification
- Hourly employees
- Salaried employees
- Exempt employees
- Non-exempt employees
- Seasonal employees
- Part-time employees
- Full-time employees
Improper classification can affect payroll taxes, overtime requirements, benefits, and compliance reporting.
Payroll Reporting and Record Retention
Maintain:
- Payroll registers
- Payroll journals
- Employee earnings
- Payroll tax filings
- Direct deposit records
- Benefit deductions
- Time records
- Contractor payments
- W-2 records
- 1099 records
- Payroll adjustment history
Payroll Compliance and Bookkeeping
Payroll compliance should also include accounting review.
Verify:
- Payroll expenses
- Employer payroll taxes
- Payroll liabilities
- Benefit expenses
- Payroll clearing accounts
- Payroll cash accounts
- General Ledger entries
- Financial statements
Learn more about Bookkeeping Services | Accounting Services | Payroll Processing Services | Payroll Year End Checklist
Common Payroll Compliance Mistakes
Incorrect Employee Classification
Employees classified incorrectly.
Missing Payroll Tax Filings
Federal or state payroll filings missed.
Incorrect Payroll Taxes
Employee withholding errors.
Poor Record Retention
Payroll records not maintained.
Payroll Not Matching Books
Payroll journals do not reconcile.
Missing Year-End Reporting
Late W-2 or 1099 preparation.
Simple Payroll Pricing
RemoteBooksOnline payroll is designed with clear monthly pricing. Full Payroll is $50 per month plus $7 per employee. Basic Payroll is $40 per month plus $6 per employee. Additional states are $10 per month per state. There are no per-run payroll fees.
Need Help Staying Payroll Compliant?
RemoteBooksOnline can help review payroll reporting, payroll tax filings, employee classifications, payroll reconciliation, bookkeeping alignment, W-2 reporting, and ongoing payroll compliance.
Need Payroll Compliance Support?
RemoteBooksOnline can help simplify payroll processing, payroll tax compliance, bookkeeping reconciliation, payroll reporting, W-2 preparation, and year-end payroll requirements.
Frequently Asked Questions
What is payroll compliance?
Payroll compliance means following payroll tax laws, labor regulations, employee classification rules, payroll reporting requirements, and maintaining accurate payroll records.
Why is payroll compliance important?
Payroll compliance helps businesses avoid tax penalties, payroll filing issues, employee payment errors, and financial reporting problems.
What payroll records should businesses keep?
Payroll journals, payroll registers, employee records, payroll tax filings, payroll reports, W-2s, 1099s, direct deposit records, and payroll adjustments.
How often should payroll compliance be reviewed?
Payroll compliance should be reviewed throughout the year, during every payroll cycle, quarterly payroll filings, and year-end reporting.
What payroll taxes should businesses review?
Federal payroll taxes, state payroll taxes, unemployment taxes, local payroll taxes where applicable, and employer payroll tax liabilities.
Does payroll compliance affect bookkeeping?
Yes. Payroll compliance affects wages, payroll liabilities, payroll expenses, payroll taxes, benefits, deductions, and financial reporting.
What happens if payroll is not compliant?
Businesses may face payroll tax penalties, interest, incorrect employee payments, reporting issues, and accounting reconciliation problems.
Can RemoteBooksOnline help with payroll compliance?
Yes. RemoteBooksOnline helps businesses review payroll processing, payroll reporting, payroll tax filings, bookkeeping alignment, and payroll compliance.
How much does RemoteBooksOnline payroll cost?
Full Payroll is $50 per month plus $7 per employee. Basic Payroll is $40 per month plus $6 per employee.
Where do I start?
Request a payroll quote and our team can review your payroll process, payroll compliance, employee count, bookkeeping, and payroll reporting.