Payroll Services Memphis TN

Establishing a Pay Period

Payroll periods can be regular or "miscellaneous." Regular payroll periods are daily, weekly, bi-weekly, semi-monthly, monthly, quarterly, semi-annually, and annually. These correspond to the methods for withholding federal income tax. A miscellaneous payroll period is any payroll period other than a regular one (for example, a payroll period of 10 days). Sundays and holidays are included in computing the number of days in such payroll period, after which the daily withholding table is used to compute the tax on the wage payments.

The payroll period you establish triggers the date and timing of payments that you owe the government because of taxes you collected.

Some other questions that may pop up once you've established a payroll period are:

Can there be more than one payroll period? An employee can have only one payroll period for wages paid by any one employer. If an employee is paid a regular wage for a weekly payroll period and, in addition, is paid supplemental wages (a bonus, for example) determined for a different period, the payroll period is still weekly. Your payroll period will be determined by actual pay practices, rather than by a declaration of a payroll period that conflicts with actual practice.

What should I do if an employee doesn't work a whole pay period? The fact that an employee does not work an entire payroll period has no effect on the payroll period. This is true whether an employee starts work or is terminated during a payroll period. For example, Bill has an established weekly payroll period. He is usually paid $320. He is absent three days during one week, resulting in actual earnings for that week of $128. The tax to withhold is computed based on a weekly payroll period for the amount actually earned — $128. It is not computed by finding the tax due on $320 and taking 40 percent of that amount.

How should I handle occasional variations in payroll? If the payroll periods are all of uniform duration, there is no problem. If, however, there is an occasional variation, the payroll period and withholding requirements do not change. This is true even if that period does not coincide with the actual period for which a given payment is made. For example, the No-Return Travel Agency ordinarily pays its employees at the end of the week. However, when an employee was sent on a three-week trip, he was given a single paycheck for those three weeks when he came back. The payroll period is still weekly and, for withholding purposes, the payment must be treated as if it were three separate weekly wage payments.

How should I handle part-time employees' and temporary employees' pay periods? Ask the following questions to determine the payroll period of a part-time or temp...