Small businesses are said to employ almost half of all workers in the U.S. and if you run a business with employees, then your payroll is likely to be a little different this year; here are the top 10 changes to payroll for 2019:
1. Rule changes for minimum wage
State and local rates apply if wages are higher than the federal rate (which remains unaltered at $7.25 per hour), and as a result, around 20 states have increased their rates from the beginning of the year.
2. New requirements for employment posters:
You can check with DOL, OSHA and your local labor department for free posters to display applicable minimum wage rates and other information, something that employers are now legally obliged to display.
3. New limits for Social Security:
The employer and the employee pay 6.2% of Social Security tax up to the wage base limit, and for 2019, this is set at $132,000 and has risen from $128,400 in 2018.
4. Increased limits for qualified retirement plans:
If you offer your employees a 401(k) or SIMPLE IRA, then the limits have increased since the previous year. Check with your local payroll provider for more detailed information.
5. New limits for FSA’s:
In 2018, the amount of compensation that employees could commit to medical flexible spending accounts (FSA’s) was set at $2,650 and has since increased to $2,700. The limit for dependent care FSA’s, however, remains fixed at $5,000 and is not annually adjusted.
6. Options for medical coverage:
Currently, the employer mandate for companies with 50 or more full-time equivalent employees remains in place, but smaller employers can choose to provide coverage with some changes to the laws to be noted in 2019, such as:
- The limit for health savings accounts has risen and
- There are increased contribution amounts for qualified small employer health reimbursement arrangements such as QSEHRA’s
7. Other employee benefits that may have changed:
Benefits such as transportation, that may include free parking, transit passes etc, have increased amounts that can be received tax-free. Up from $265 per month last year, the total is now $270, but this benefit cannot be deducted.
8. Possible changes to state unemployment taxes:
Some changes that may have occurred in 2019 are those to unemployment tax rates, and these changes may be due to new or altered laws, such as increased state unemployment tax base amounts in Oregon and Washington, or an individual’s claims experience.
9. Changes to workers compensation costs:
Checking with your state is the only way to know for sure whether your premium rates are now higher, lower or remain unchanged.
10. New employment laws:
Most small business owners know that the world of employment rules and regulations can be a complicated one, and the only way to know for sure if any new laws affect you and your employees is to check with your local employment specialists or payroll providers.
Staying abreast of payroll and its many complex laws can be tricky, but provided you get your information from a reputable source and consult with professionals every step of the way, there’s no reason why you shouldn’t remain compliant and keep your employees content at the same time.