In this issue we will discuss the way we are distributed, as well as some payroll tips. Also, we continue with excellent health insurance/plan tips from PEO Pros Benefits Administrator Pam Gass.

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One question that we get often is; “What do I have to run through payroll, and what can I just give my employees directly?”

Obviously, there are several parties that insist on you reporting accurate payroll. The IRS is very concerned for tax reasons, including Federal Withholding (FWT), Social Security (FICA), Medicare, and Federal Unemployment Tax Assessment (FUTA). The state of Florida , for example, is concerned about your State Unemployment Tax Assessment (SUTA) and your worker's comp premium

The worker's comp insurance company wants an accurate assessment of payroll as well, because that is how premium is determined, either by a predetermined estimate which is audited at the end of the year, or by the increasingly popular “Pay as you Go” programs.

Let's state what must be reported for tax purposes:

1) All standard payroll (obviously) including wages, salaries, commissions, etc.

2) Tips and Excessive Gifts

3) Year end bonuses (considered standard income)

4) Expense reimbursement (in most cases)

Let's go in to #4. Many contractors believe they can pay their employees a large “expense account” to avoid taxes. Not necessarily. Expenses can be paid if receipts for actual expenses are provided, and the expenses must be required to perform assigned duties.

In order to pay a general expense fund, such as a certain amount per hour of duty, you must be set up to pay per diem. Per diem is only tax free if the employee is on duty more than 1 hr transportation time from the home office for more than 8 hrs a day . Otherwise, per diem is considered extra wages and must be included.

Be very careful with this! Intentional misrepresentation of payroll is considered fraud, a felony, and may be punishable with prison time and large fines. Consult your CPA before you try anything questionable!

In the issues to come, we will discuss the following worker's comp issues: comp codes and rates, experience modifiers, safety credits, drug-free workplace credits, and other topics.

The ABC's of Benefits, Part 2

Pamela Gass, Benefits Administrator for PEO Pros

Last time we discussed HCRAs and HSAs. This week we tackle the Dependent Care Reimbursement Account or DCRA. As always, if you have any questions for me or my staff, please contact me via our website @ http://PEO-Pros.com and we will get you an answer ASAP.

We want to be a valuable resource for your benefit needs!

Q - DCRA…what's the deal with a DCRA??

A - DCRA is an acronym for Dependent Care Reimbursement Account. Essentially, this is another pre-tax benefit that employees can choose as a way of paying for out of pocket Day Care or Dependent Care expenses. This works very similar to the HCRA, in that you can have the money deducted from your paycheck on a pre-tax basis and placed into a Dependent Care Reimbursement Account. Then when you have out of pocket Day Care expenses, you can file for reimbursement. So, this is like paying for your Day Care expenses pre-tax! There are many tax rules as well as pros and cons, so you should consult a tax professional or benefits administrator for more information.

Next issue we will discuss the difference between co-pay and co-insurance.

"PEO Pros got the job done fast."

Lou Cortes, Safeguard Environmental Services

I was up against a wall. I had a contract starting in two days that required a Worker's Comp certificate. I knew the PEO Pros folks from a local networking group. I called them and explained my problem on a Tuesday. By Thursday I had my payroll set up and a comp certificate in my hand, and more importantly, in my client's hand. Since then I have been amazed at the excellent service and tremendous relief that tax, payroll, comp and HR headaches are no longer mine alone, but I have a full time partner in PEO Pros to help me solve any of those problems. Thank you PEO Pros!

(If you would like to have your testimonial printed here, please contact our office.)

We'd like to thank our partners in our business:

Scott Kidd with No Joke Biz

The East Orlando Chamber of Commerce

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