Avoiding Payroll Penalties: What Small Businesses Need to Know

Payroll mistakes aren’t just frustrating—they’re costly. From missed deadlines to misclassified employees, small payroll errors can lead to steep penalties and unhappy teams. The good news? With the right processes in place, they’re entirely preventable.

1. Understand Your Tax Responsibilities

Employers are responsible for withholding income taxes, Social Security, and Medicare—and submitting them on time. Missing a due date or underpaying can result in fines and interest that stack up quickly.

2. Correctly Classify Employees and Contractors

Misclassifying a worker as an independent contractor when they should be an employee is a common and costly mistake. It affects tax withholding, benefits, and compliance. When in doubt, consult a professional.

3. Stay Current on Regulations

Payroll laws vary by state and change frequently. Overtime rules, minimum wage rates, and paid leave requirements can shift from year to year. If you’re not keeping up, your business could fall behind—and face penalties.

4. Keep Accurate Records

Detailed payroll records protect you during audits and ensure you’re paying employees fairly. Keep timecards, pay stubs, and tax documents organized and accessible.

5. Automate What You Can

Using a trusted payroll service helps reduce human error, ensures timely payments, and keeps you compliant with ever-changing laws and deadlines.

Let 614 Associates Keep You Compliant—and Confident

We take the stress out of payroll with solutions that are accurate, timely, and tailored to your business. Avoid penalties and focus on what matters most—growing your business.

👉 Reach out today and let 614 Associates handle your payroll with precision and care.