10 Things to Know about your Payroll

Payroll can be confusing and overwhelming. Here are 10 key things to know to help demystify the process. By understanding your payroll, you can be sure that you're getting paid accurately and on time. What is included in your paycheck?  How often will you get paid?   When do taxes come into play?   What deductions can be made from your paycheck?  What do those deductions on your paystub mean?  How can you get a copy of an old paycheck?

You also need to know what you're entitled to as terms and conditions of employment.

1. You will be paid for all hours worked, whether or not your employer has cut a check yet (or made the deposit). Do not withhold labor until payment is received; it doesn't work that way! You must turn over all hours worked—including overtime—in exchange for the money due to you, regardless of whether or not the company made a timely deposit. That being said, if the company does not make timely payments, you should immediately send them a letter demanding prompt payment. If they still do not pay as agreed, it would be appropriate to bring suit for breach of contract (i.e., failure to pay) against the employer.

2. Pay periods vary according to the size and type of business; either monthly or biweekly are standard timesaving measures for employers in calculating payroll amounts due to employees on an ongoing basis. Some companies adhere to annual pay periods (i.e., paid once per year), but this is rare nowadays. You must know when your next payday is so that you can plan accordingly.

3. You will be paid for all hours worked, whether or not your employer has cut a check yet (or made the deposit). Do not withhold labor until payment is received; it doesn't work that way! You must turn over all hours worked—including overtime—in exchange for the money due to you, regardless of whether or not the company made a timely deposit. That being said, if the company does not make timely payments, you should immediately send them a letter demanding prompt payment. If they still do not pay as agreed, it would be appropriate to bring suit for breach of contract (i.e., failure to pay) against the employer.

4. A payroll is defined as "all of an organization's employees or perhaps just a particular department's staff." It does not have to be the total amount of money that is paid out to all employees during a given time period. For instance, if your employer pays you $8/hour, but only takes taxes and other deductions from your first $7.25/hour (explained below), your net pay (take-home pay) is actually more than what was counted as payroll.

5. Withholding taxes are the monies withheld by an employer for federal, state, and sometimes local income taxes, Social Security, and Medicare. The Federal Insurance Contributions Act (FICA) requires employers to withhold 6 percent of an employee's wages for Security tax and 1–1.45 percent for Medicare tax. The act also requires the employer to contribute the same amount, so Social Security and Medicare taxes together are often called "FICA taxes" or "Social Security/Medicare taxes." These amounts are submitted to the government (together with employers' matching contributions) to fund various government programs.

6. Deductions can be made from your paycheck in order for your company to avoid some federal, state, and local income taxes; FICA; insurance premiums; cash advances; loans; stock purchases; tuition reimbursement (before any limit is reached); moving expenses (taxable if not reimbursed by employer); retirement plan contributions or loan repayments unless employees have specifically signed a deferment agreement that documents the requirement that the employer deducts loan repayments from the payroll; and medical, dental, and vision care premiums, but only if employees have not opted out of such coverage.

7. Commissions are "payments made to salespeople and others who generate income for their companies." Unlike wages, which must be paid at least twice a month (by law), commissions can be paid as often as monthly or even more frequently as agreed upon by the parties involved (though this is rare). Generally speaking, though, commissions are usually paid on a monthly basis. However, there may be times when an employer chooses to pay an employee weekly or daily. The important thing is that you know your rights and always receive what you've earned.

8. Reimbursement is the act of making an employee whole for expenses incurred on behalf of their employer. For example, suppose you are traveling on company business and use your personal vehicle to get to an out-of-town client meeting. In that case, you'll be reimbursed for any gasoline that you purchased while conducting company business (up to a specific limit).

9. Overtime has nothing to do with the number of hours worked in a given day or week; it's all about how many hours per pay period an hourly worker works over 40.

10. The Fair Labor Standards Act (FLSA) does not require overtime payment when employees work fewer than 40 hours in a given workweek. It's important to understand that there is a difference between hourly and salary workers regarding overtime pay.

That being said, most employers must follow the federal and state laws and regulations regarding the payment of wages. If you feel like you are not getting paid appropriately or enough, it's time to take matters into your own hands with legal action.

If you have any questions about your rights as an employee concerning your employer, don't hesitate to get in touch with our team today for more information!

Source reference: all information is from https://www.dol.gov/general/topics