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  • In this blog, we will go over how to navigate Ohio’s new minimum wage law and what your business needs to know to stay compliant and competitive in 2025.

    The state minimum wage is scheduled to rise from $10.45 to $10.70 per hour on January 1, 2025, while the hourly rate for tipped employees will go from $5.25 to $5.35. This shift is driven by a 2006 constitutional amendment requiring automatic, inflation-based adjustments to the minimum wage. Although 25 cents might seem minimal, it can have real implications for your staffing costs, compensation structures, and overall compliance strategy.

    Let’s break down the core details of this new law and address key steps to ensure your business is ready.

    What’s Changing

    Non-tipped employees

    • 2024 rate: $10.45 per hour.
    • 2025 rate: $10.70 per hour.
    • Who it covers: Employees of businesses with annual gross receipts exceeding $394,000 per year (up from $385,000 in 2024).

    Tipped employees

    • 2024 rate: $5.25 per hour.
    • 2025 rate: $5.35 per hour.
    • Who it covers: Employees who customarily and regularly receive more than $30/month in tips. Employers can use a tip credit, provided the combined cash wage plus tips meets or exceeds $10.70/hour.

    Small businesses and younger workers

    • Small employers: If your business has annual gross receipts of $394,000 or less, you’ll follow the federal minimum wage of $7.25/hour.
    • 14- and 15-year-olds: Must also be paid at least $7.25/hour.

    These changes stem from Ohio’s constitutional amendment (II-34a), which links annual minimum wage increases to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). According to state data, the CPI-W increased by 2.4% from September 1, 2023, to August 31, 2024, which triggered the $10.70 and $5.35 rates for 2025.

    Who’s Impacted By The 25-Cent Hike

    On the surface, a quarter raise might not sound substantial – but it still makes a difference:

    Directly affected workers

    About 112,700 Ohioans earning below $10.70 will see an immediate pay increase.

    Indirectly affected workers

    Employers often adjust wages for staff making slightly above $10.70 to maintain equitable pay scales, potentially affecting another 200,000 employees.

    Tipped employees

    Roughly 97,700 tipped workers will be directly or indirectly impacted as the tipped rate jumps to $5.35/hour, plus any additional tip credit to reach the full minimum.

    For small to midsize businesses (SMBs), these increases can influence everything from your bottom line to your competitive standing in Ohio’s labor market. Think about how a modest wage increase might help you retain talent or attract new hires, given that surrounding states may have their own wage adjustments, or none at all.

    Why The Increase Matters

    Keeping pace with inflation

    Ohio is one of 20 states and D.C. that tie the minimum wage to inflation, aiming to preserve workers’ purchasing power. Prices have jumped by 22.7% in the past five years, though recent inflation rates have cooled to about 2.9%. This annual wage adjustment helps lower-income families cope with the rising cost of living.

    Impact on family incomes

    According to research, over 28% of Ohio families living below the federal poverty line will see a paycheck boost. It can be easy to underestimate how $0.25/hour adds up over a year, but for many low-wage workers, every cent counts, especially as they face rising housing, food, and transportation costs.

    Potential ripple effects

    Employees already earning slightly above $10.70 may expect a wage increase for fairness and morale. Failing to adjust could cause frustration or turnover. At the same time, these increases can strain payroll budgets if you haven’t planned ahead, highlighting the importance of forecasting labor costs well in advance.

    Key Compliance Steps

    1. Evaluate gross receipts

    Determine if your annual gross receipts exceed $394,000. If so, you must pay at least $10.70 (or $5.35 plus tips). If not, you’ll follow the federal rate of $7.25.

    1. Update your payroll systems

    Make sure any software or platform you use for employee wages is prepared to automatically update hourly rates come January 1, 2025.

    1. Adjust pay scales where needed

    Employees who earn just above $10.70 may expect an increase to maintain fairness. Review your internal pay structures or consult with an HR expert about how best to handle this.

    1. Revise tipped policies

    If you use the tip credit, confirm that tips plus the new $5.35/hour combine to meet or exceed $10.70/hour. Keep accurate tip records to meet regulatory standards and prevent disputes.

    1. Overtime obligations

    Remember, you must still pay time-and-a-half for hours exceeding 40 in any given week, unless you gross under $150,000 annually (Ohio’s threshold for certain overtime exemptions).

    How GMS Can Help

    Navigating wage hikes might sound straightforward – just pay the higher rate, right? But these changes often trigger a series of administrative hurdles, from updating payroll and revising tip policies to ensuring compliance for younger workers. That’s where Group Management Services (GMS) comes in:

    • Expert HR guidance: GMS stays on top of changing minimum wage laws, payroll regulations, and other employment mandates, so you don’t have to. We’ll help you figure out compliance and coach you on any next steps.
    • Integrated payroll solutions: GMS can help you avoid manual errors or outdated pay rates. Our payroll services adjust for new wage laws and maintain accurate records, so you can avoid penalties.
    • Employee classification and documentation: If you’re unsure whether an employee qualifies as a “tipped” worker or need assistance with documentation, GMS can provide clarity and guidance.

    When you partner with GMS, you gain a dedicated team that takes care of HR complexities, allowing you to focus on running your business. Contact GMS to streamline your payroll, ensure full compliance, and keep your business growing.

  • The SECURE Act 2.0 introduces significant changes in 2025 that will impact how employers manage retirement and benefits plans. These regulations aim to enhance retirement security and improve access to employer-sponsored retirement plans. Staying compliant with these changes is crucial for businesses to avoid penalties and ensure employees benefit from the new provisions.  

    Key Provisions Of The SECURE Act 2.0  

    Enhanced eligibility for part-time workers 

    Beginning in 2025, part-time employees who work at least 500 hours annually for two consecutive years will gain eligibility to participate in their employer’s 401(k) plan. This builds on the previous SECURE Act’s three-year requirement. Employers need to prepare by updating their tracking systems to identify eligible employees and ensuring enrollment processes are streamlined. 

    Automatic enrollment and escalation requirements 

    Newly established 401(k) and 403(b) plans must include automatic enrollment features. Employees will be automatically enrolled at a minimum contribution rate of 3%, with automatic annual increases of 1% until contributions reach at least 10%, but not more than 15%. Employers should review plan designs and payroll systems to ensure these requirements are met.

    Emergency savings accounts 

    The SECURE Act 2.0 introduces optional emergency savings accounts linked to retirement plans. These accounts allow employees to save up to $2,500 annually on a Roth basis, providing a tax-advantaged way to address financial emergencies. Employers interested in offering these accounts must work with plan administrators to integrate them into their benefits packages. 

    Increased catch-up contributions 

    For employees aged 60 to 63, the catch-up contribution limit for 401(k) plans will increase to the greater of $10,000 or 150% of the standard catch-up contribution limit for that year. Employers must ensure payroll systems and retirement plan documents reflect these updated limits. 

    Student loan repayment matching contributions 

    Employers can now make matching contributions to 401(k) or 403(b) plans based on an employee’s qualified student loan payments. This provision incentivizes retirement savings while helping employees pay off student debt. Employers should consider whether this feature aligns with their benefits strategy and work with plan administrators to implement it. 

    How GMS Can Help Your Business Stay Compliant 

    Navigating these complex changes can be overwhelming, especially for small and midsize businesses. Group Management Services (GMS) provides the tools and expertise to help employers stay ahead: 

    • Compliance guidance: Our team monitors legislative changes to ensure your business complies with all SECURE Act 2.0 regulations. We help update plan documents, adjust eligibility criteria, and align payroll systems with the new requirements. 
    • Plan design and administration: We work with your business to design a retirement plan that meets regulatory standards and your employees’ needs. Our experts can also coordinate with plan administrators to integrate new features, such as emergency savings accounts and student loan repayment matching. 
    • Employee education and enrollment support: Educating employees about their retirement options is critical for participation. GMS provides resources to help employees understand new features and make informed decisions about their financial future. 
    • Payroll integration: GMS simplifies payroll integration for features like automatic enrollment, increased catch-up contributions, and eligibility tracking for part-time workers. Our comprehensive payroll solutions ensure a seamless transition to compliance. 

    Preparing For 2025 

    The 2025 changes under the SECURE Act 2.0 emphasize the need for proactive planning and compliance. Employers who act now can not only avoid penalties but also enhance their benefits offerings to attract and retain top talent. Partnering with GMS ensures your business is equipped to manage these regulatory changes with ease.  

    Contact GMS today to learn how we can help your business meet the requirements of the SECURE Act 2.0 and beyond. 

  • As we move into 2025, businesses across the U.S. face changing minimum wage requirements, with 23 states and Washington, D.C., implementing increases. Inflation adjustments, pre-scheduled state laws, and voter-approved initiatives primarily drive these changes. Here’s a comprehensive overview of the updates and what they mean for employers. 

    The Federal Minimum Wage 

    The federal minimum wage remains $7.25 per hour. While this serves as a baseline, 30 states and Washington, D.C., set higher minimum wages, often tying increases to inflation or cost-of-living adjustments. However, 20 states still default to the federal rate, emphasizing the disparity in wage standards across the country. 

    State-by-State Updates For 2025 

    • Significant increases: States such as Michigan will see substantial increases due to legal rulings and voter measures. Michigan’s wage will rise from $10.56 to $12.48 in February of 2025, reflecting a 20% jump. 
    • Modest adjustments: States like Montana and Ohio will experience smaller increases of $0.25, with rates reaching $10.55 and $10.70, respectively. 
    • Top rates: Washington State leads with a minimum wage of $16.66, followed by California at $16.50 and Connecticut at $16.35. Washington, D.C., is expected to raise its already high rate of $17.50 based on cost-of-living adjustments midyear. 
    • Regional variations: States like Oregon and New York apply regional minimum wages, creating differing rates within state boundaries. For example, in Oregon, wages range from $13.70 in rural areas to $15.95 in the Portland metro area. 

    These updates highlight the growing complexity of minimum wage compliance, especially for businesses operating across multiple states. 

    Challenges For Remote And Multistate Teams 

    The rise of remote work adds another layer of complexity. Employers must account for the minimum wage laws in the state where each remote worker resides, even if the business operates elsewhere. For instance, a company headquartered in a federal minimum wage state may need to comply with California’s $16.50 rate for its remote employees. 

    Implications For Employers 

    • Payroll adjustments: Employers must update payroll systems to reflect the new rates and ensure timely compliance. 
    • Budgeting: Wage increases may impact labor costs, requiring adjustments in pricing strategies or workforce planning. 
    • Compliance risks: Noncompliance can lead to legal and financial penalties, particularly in states with rigorous enforcement mechanisms. 

    How GMS Can Help 

    Navigating minimum wage changes and maintaining compliance is a significant challenge, particularly for businesses managing remote teams or operating in multiple states. Group Management Services (GMS) offers comprehensive payroll and HR solutions, helping businesses: 

    • Track and implement state-specific wage changes: Our tools ensure your payroll remains compliant, no matter where your employees are located. 
    • Streamline multistate compliance: We simplify managing wage laws across jurisdictions, minimizing administrative burdens. 
    • Enhance workforce planning: Our expert advisors assist in budgeting for wage increases and optimizing labor costs. 

    By staying informed and partnering with experts like GMS, your business can adapt to these changes efficiently, ensuring compliance and protecting your bottom line. 

  • Illinois employers with 15 or more employees will soon be required to openly share pay scales and benefits in job postings.

    On January 1, 2025, amendments to Illinois’ Equal Pay Act of 2003 will take effect, placing new responsibilities on employers and employment agencies operating in the state. These changes are part of a broader push toward wage transparency and fairness, and they will impact how businesses recruit, retain, and compensate their workforce. In addition to pay scale and benefits disclosure, the law also strengthens recordkeeping requirements and outlines a new process for dealing with complaints.

    Whether you’re a small local business or a larger multi-state operation, these new rules represent a shift in how you communicate with potential hires and engage with current employees. Let’s break down the key points.

    A Closer Look At The New Requirements

    Mandatory pay transparency in job postings

    For employers with 15 or more employees, pay scales and benefits must be included in all specific job postings. This could be a wage or salary range, along with details about benefits like bonuses, stock options, health coverage, and other forms of compensation. Employers can reference a pay scale set by market data, internal pay ranges, or a previously established budget for the position.

    Promotion postings for internal candidates

    The law also requires employers to announce promotion opportunities internally no later than 14 days after making an external job posting. By doing so, the state aims to encourage fair, equitable access to advancement within organizations.

    Recordkeeping obligations

    Employers must maintain documentation on wages, job postings, and associated pay scales and benefits for five years. This ensures that if questions arise (from employees or regulators) you’ll have the records to show you’ve followed the rules.

    Complaint and enforcement mechanisms

    Employees, and in some cases job applicants, can file complaints if they believe there’s been a violation of the Equal Pay Act or the new requirements. The Illinois Department of Labor (IDOL) can investigate, and if it finds violations, issue penalties. These fines can escalate up to $10,000 for repeated offenses.

    Why These Changes Matter

    Promoting trust and fairness

    Transparency around pay and benefits can build trust with both current employees and potential hires. It sends a clear signal that:

    • You value fairness
    • You have nothing to hide
    • You’re committed to creating a level playing field

    This sort of openness can translate into better employee morale, stronger retention, and a more attractive employer brand.

    Staying ahead of regulatory trends

    Illinois is not alone in pursuing pay transparency measures. Many states and jurisdictions are adopting similar requirements. Being proactive in Illinois may give you a head start if you operate or expand into other states with comparable laws. Beyond pure compliance, embracing transparency now shows that you’re on the cutting edge of best practices in HR and compensation management.

    Avoiding financial risks

    Non-compliance could result in significant penalties. Beyond that, there’s also the potential reputational damage. Employees and job candidates can easily learn about infractions that appear in public records. Being proactive helps shield you from such setbacks.

    Practical Steps To Prepare

    1. Review and update pay scales

    If you haven’t established formal pay scales or if your current ranges are outdated, now’s the time to get organized. Set clear criteria for determining pay ranges-consider market data, industry standards, and geographic factors. Document these criteria and ensure consistency.

    1. Examine your benefits offerings

    The new law requires not just pay information, but also a “general description” of the benefits and other compensation offered for each position. Make sure you can clearly articulate what you provide, such as:

    • Health insurance options
    • Retirement plans
    • Bonuses
    • Paid time off (PTO)
    • Other perks

    Have a system to keep this information current as offerings evolve.

    1. Adjust your job posting processes:

    Build compliance into your recruitment workflow. Before posting a job, confirm that the pay scale and benefits information is accurate and up to date. If you work with a third-party recruiter or job board, ensure they have the necessary details.

    1. Strengthen your recordkeeping:

    of all job postings, pay ranges, benefits information, and employee wage data. Since you’ll need to retain this documentation for at least five years, consider implementing a reliable HR information system (HRIS) or leveraging an external partner to streamline these tasks.

    Looking Ahead

    As we approach January 1, 2025, the clock is ticking for Illinois employers to adapt. Navigating the new Illinois pay transparency requirements can feel overwhelming, especially when you’re already juggling countless HR responsibilities. That’s where Group Management Services (GMS) comes in. When you partner with GMS you get:

    • Compliance guidance: We can help clarify the new Illinois requirements and show you how they fit into your current HR strategy.
    • Efficient recordkeeping: We’ll help implement systems that keep all the necessary information at your fingertips, reducing stress when it’s time to prove compliance.
    • Training and support: Need help educating your team or ensuring that your posting and promotion processes meet the new rules? GMS can provide the resources, tips, and best practices you need to ensure everything is aligned.
    • Integrated payroll and benefits administration: GMS integrates payroll and benefits into a cohesive system. This integration ensures accurate pay data, easy updates to employee compensation, and clear, accessible benefits information for current and prospective employees.

    Ready to prepare your business for Illinois’ upcoming law changes? Contact GMS today to learn how we can help you stay compliant and thrive in an evolving regulatory landscape.

     

     

  • The U.S. Department of Labor (DOL) has announced a proposed rule to phase out the distribution of certificates that allow employers to pay certain workers with disabilities less than the federal minimum wage of $7.25 per hour. The rule proposes to gradually eliminate certificates that employers can apply for under Section 14(c) of the Fair Labor Standards Act (FLSA), which allows them to pay subminimum wages to certain workers with disabilities. For nearly a century, it has been legal in the U.S. to pay some individuals with disabilities below the minimum wage. Currently, about 40,000 American workers fall into this category, with some earning as little as 5 cents an hour. 

    Key Details Of The Proposal 

    • Phase-out timeline: If adopted, new 14(c) certifications will no longer be issued. Existing programs will be phased out over three years starting from the final rule’s effective date. 
    • Legal and political challenges: The proposal must navigate public commentary, possible legal hurdles, and political opposition before becoming finalized. 
    • Economic and workplace impacts: Employers and advocacy groups have debated the implications, with some fearing fewer opportunities for workers with disabilities and others emphasizing the need for equity in the workplace. 

    What’s Next? 

    The DOL is currently seeking public feedback on the proposal. Employers should monitor these developments closely to prepare for potential regulatory changes. If finalized, businesses employing workers under 14(c) must reevaluate their wage practices and compliance strategies. 

    How GMS Can Help 

    Navigating evolving employment regulations can be challenging. Group Management Services (GMS) specializes in helping businesses stay compliant with labor laws, including wage and hour rules. From workforce management to payroll processing and compliance guidance, GMS provides the expertise and tools you need to adapt to regulatory changes while supporting your employees. Contact us today to learn how we can help your business stay compliant. 

  • On November 15, 2024, the U.S. District Court for the Eastern District of Texas issued a ruling that vacated the Department of Labor’s (DOL) recent changes to overtime salary thresholds. This decision, effective nationwide, has significant implications for employers navigating wage and hour compliance under the Fair Labor Standards Act (FLSA). 

    The overturned rule, finalized on April 23, 2024, proposed the following changes to the salary threshold for exempt employees (those not entitled to overtime pay): 

    • Raising the salary threshold from $684 per week ($35,568 annually) to $844 per week ($43,888 annually), effective July 1, 2024. 
    • Further increasing the threshold to $1,128 per week ($58,656 annually), scheduled for January 1, 2025. 

    However, with the court’s recent decision, employers no longer need to implement these increases. 

    Key Points From The Court’s Decision 

    The court’s ruling centers on the DOL’s authority to set salary thresholds for overtime exemptions. While the FLSA allows the DOL to define and delimit exemptions for bona fide executive, administrative, and professional (EAP) employees, the court found that the 2024 rule overstepped this authority. Specifically, the rule’s high salary thresholds were seen as overshadowing the duties-based test required to determine exemption status. 

    In a related case earlier in 2024, the Fifth Circuit Court of Appeals emphasized that while salary can serve as an objective measure for exemption, it must not replace the primary consideration of job duties. The District Court echoed this sentiment, concluding that the 2024 rule’s salary increases effectively nullified the duties-based exemption criteria. 

    What’s Next? 

    The DOL may appeal the decision but given the court’s reasoning and the upcoming change in presidential administration, the likelihood of the rule’s revival appears slim. For now, the pre-2024 thresholds remain in place: 

    • A salary threshold of $684 per week ($35,568 annually) for exempt EAP employees. 
    • A highly compensated employee (HCE) threshold of $107,432 annually. 

    Staying updated on these developments as the situation evolves is critical for employers to ensure compliance and minimize disruptions. 

    Navigating Compliance Amid Uncertainty 

    The court’s ruling highlights the ongoing challenges businesses face in maintaining compliance with labor laws. Wage and hour regulations frequently change, making it essential for employers to stay informed and prepared. 

    At Group Management Services (GMS), we understand the complexities of workforce management. Our team of HR experts work closely with businesses to navigate regulatory changes, ensuring compliance and reducing administrative burdens. From policy updates to payroll management, we offer comprehensive solutions tailored to your needs. Contact us today to learn how we can help your business thrive. 

  • The Internal Revenue Service (IRS) has announced the annual adjustments to the standard deduction and tax brackets for tax year 2025, effective January 1, 2025. It’s important to note that these figures will be used to prepare your 2025 tax returns in 2026, not for your 2024 tax returns. Understanding these changes is vital for effective business planning and budgeting. 

    If you don’t anticipate significant changes in your financial situation for 2025, you can use these updated numbers to estimate your tax liability. However, if you expect changes such as increased income, getting married, starting a business, or having a baby, you should consider adjusting your withholding or estimated tax payments accordingly. Continue reading to understand how the adjustments impact you and your employees. 

    2025 Tax Bracket Overview 

    Each year, the IRS adjusts tax brackets to reflect changes in the cost of living, which helps maintain taxpayer purchasing power. For tax year 2025, the top tax rate remains 37% for individual single taxpayers with incomes greater than $626,350 ($751,600 for married couples filing jointly). The other rates are: 

    • 35% for incomes over $250,525 ($501,050 for married couples filing jointly). 
    • 32% for incomes over $197,300 ($394,600 for married couples filing jointly). 
    • 24% for incomes over $103,350 ($206,700 for married couples filing jointly). 
    • 22% for incomes over $48,475 ($96,950 for married couples filing jointly). 
    • 12% for incomes over $11,925 ($23,850 for married couples filing jointly). 
    • 10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly). 

    Standard Deduction And Personal Exemptions 

    The IRS defines the standard deduction as a precise dollar amount that reduces the amount of income on which you’re taxed. A standard deduction consists of the sum of the basic standard deduction and any additional standard deduction amounts for age and blindness. The standard deduction has also increased for 2025: 

    • For single taxpayers and married individuals filing separately for tax year 2025, the standard deduction rises to $15,000 for 2025, an increase of $400 from 2024. 
    • For married couples filing jointly, the standard deduction rises to $30,000, an increase of $800 from tax year 2024.  
    • For heads of households, the standard deduction will be $22,500 for tax year 2025, an increase of $600 from the amount for tax year 2024. 
    • Personal exemptions for tax year 2025 remain at zero, as in tax year 2024. The elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act of 2017. 

    Additional IRS Adjustments 

    The IRS has updated a variety of other thresholds for 2025: 

    • Alternative minimum tax (AMT) exemption: $88,100 for single filers and $137,000 for married couples filing jointly. 
    • Earned income tax credit (EITC): Maximum EITC amount rises to $8,046 for qualifying taxpayers with three or more children. 
    • Flexible spending account (FSA): The contribution limit increases to $3,300. 

    For in-depth details regarding the 2025 adjustments, click here. 

    What Your Employees Should Know 

    The new tax brackets apply to all earnings starting January 1, 2025. Employees should be provided with the resources necessary to make informed decisions. The IRS offers a tax withholding estimator that helps individuals determine if they have too much federal income tax withheld, which could reduce their take-home pay. Alternatively, it can assist employees with additional income sources in deciding whether to withhold more or make an estimated tax payment to avoid a tax bill. Employees can also submit IRS Form W-4 to their HR or payroll department to ensure the correct federal income tax is being withheld. 

    What This Means For Business Owners 

    If you’re a business owner, it’s essential to understand the tax bracket adjustments and standard deductions. Paycheck withholding amounts and quarterly estimated tax payments can affect an employee’s income level subject to a higher tax bracket. Additionally, the following could impact your employees’ decisions: 

    Preparing For The Adjustments 

    Business owners should take proactive steps to prepare for these changes by: 

    • Reviewing payroll systems: Ensure your payroll systems are updated to reflect the 2025 tax brackets and standard deductions. This will help avoid discrepancies in employees’ paychecks. 
    • Communicating with employees: Inform your employees about the changes and how they might impact their take-home pay. Providing resources like the IRS tax withholding estimator can help them make informed decisions. 
    • Adjusting financial plans: Revisit your business’s financial plans and budgets to account for changes in tax liabilities. This includes reviewing estimated tax payments and potential impacts on cash flow. 
    • Consulting with tax professionals: Engage with tax advisors to understand the full implications of these changes on your business and to ensure compliance with IRS regulations. 

    How GMS Can Help With Tax Compliance 

    Navigating tax changes can be challenging, especially when it comes to payroll compliance. Failing to comply can result in hefty penalty fees. It is estimated that 40% of small businesses pay tax fines of more than $850 annually. GMS offers expert payroll tax management services, ensuring your business complies with the latest IRS updates. From handling payroll deductions to managing employee contributions, our services simplify your tax obligations, helping you focus on growth. Contact us today to learn how we can support your business.  

  • On July 17th, the Internal Revenue Service (IRS) announced that some amended employment tax returns can be electronically filed using the Modernized e-File program.  

    The Modernized E-File (MeF) Program 

    MeF is a web-based system that allows electronic filing of tax returns. E-filing saves time and money. When taxes are e-filed, whether it be for businesses, professionals, or individuals, the data is directly transmitted online from the e-filer’s servers to the tax agency’s servers.  

    The MeF program provides electronic filing and payment options for filers of corporation, employment tax, estates and trusts, excise tax, exempt organization, individual, partnership, and withholding tax returns. Learn more about these returns here. 

    Amended Returns That Can Now Be E-Filed 

    The following amended employment tax returns can now be e-filed: 

    • Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return 
    • Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund 
    • Form 943-X, Adjusted Employer’s Annual Federal Tax Return for Agricultural Employees or Claim for Refund 
    • Form 945-X, Adjusted Annual Return of Withheld Federal Income Tax or Claim for Refund 

    Note: MeF cannot be used yet to e-file Form 944-X, Adjusted Employer’s Annual Federal Tax Return or Claim for Refund, or Form CT-1 X, Adjusted Employer’s Annual Railroad Retirement Tax Return or Claim for Refund. 

    About Form 940 

    Use Form 940 to report your annual Federal Unemployment Tax Act (FUTA) tax. Workers who have lost their jobs can receive unemployment compensation through the FUTA tax and state unemployment tax systems. Employers typically pay both federal and state unemployment taxes. Only employers pay the FUTA tax; your employee’s wages should not be subject to it. 

    About Form 941-X 

    Use Form 941-X to correct errors on a Form 941 that you previously filed. Form 941 is used to report both federal income taxes and Federal Insurance Contributions Act (FICA) taxes, the latter of which includes Medicare tax and Social Security tax. 

    About Form 943-X 

    Use Form 943-X to correct errors on a previously filed Form 943. Form 943 is a tax form used to report federal income tax, Social Security, and Medicare withholdings from agricultural employees. 

    About Form 945-X 

    Use this Form 945-X to correct administrative errors only on a previously filed Form 945. If the federal income tax you reported on Form 945 (including backup withholding) differs from the amount withheld from payees, you have committed an administrative error. 

    Use Form 945 to report withheld federal income tax from nonpayroll payments. Nonpayroll payments include: 

    • Pensions (including distributions from tax-favored retirement plans, for example, section 401(k), section 403(b), and governmental section 457(b) plans), and annuities 
    • Military retirement 
    • Gambling winnings 
    • Indian gaming profits 
    • Voluntary withholding on certain government payments 
    • Backup withholding 

    GMS Helps Keep Your Business Compliant 

    Staying compliant with the ever-changing landscape of tax and payroll regulations can be daunting for any business owner. With GMS, you can skip the manual work and focus on what truly matters—growing your business. Our expert team is dedicated to keeping you informed about new laws and regulations, ensuring your business remains compliant without the hassle. Let us handle the complexities of payroll and tax management. Contact us today to learn how GMS can support your business and simplify your operations! 

  • Onboarding new employees is an exciting time, but there are important compliance requirements to handle as well. The first order of business should be having your new hire complete a Form W-4. 

    What Is Form W-4 And Why Is It Important? 

    Form W-4 allows employees to determine how much federal income tax should be withheld from their paycheck each pay period. This ensures they don’t receive a huge tax bill when filing their annual return. The Internal Revenue Service (IRS) calculates how much tax to withhold based on the withholding information each employee indicates on their Form W-4. The IRS also considers whether employees are filing jointly or independently. 

    The amount of withholding depends on the following factors: 

    • Filing status (single, married, or head of household) 
    • Number of dependents 
    • Other jobs or income sources 
    • Anticipated deductions and credits 

    Employees have access to helpful tools, such as the IRS tax withholding estimator. This tool can assist them in determining the proper withholding allowances to claim on their Form W-4. 

    Employer Responsibilities 

    As the business owner, you cannot fill out Form W-4 for your employees or influence how they complete it. If an employee doesn’t submit this form, the IRS requires you to withhold taxes from them at the highest rate (which your employees won’t be happy about). However, you do need to do the following: 

    • Provide your business’s Employer Identification Number (EIN) 
    • Note the employee’s hire date 
    • Enter your company name and address 
    • Calculate the withholding amount based on the employee’s W-4 inputs 

    It’s a good practice to remind employees to update their Form W-4 anytime they have a major life change, such as getting married, having a child, or gaining another income source. This ensures proper withholding throughout the year. 

    If your employee didn’t claim all the allowances they were entitled to, their employer cannot repay the tax previously withheld, but the employer should ensure the employee fills out a revised Form W-4 to correct the amount moving forward.  

    Let GMS Handle Form W-4 Compliance 

    Keeping up with Form W-4 rules and properly withholding taxes for all employees can be an administrative burden. That’s where GMS comes in. As a professional employer organization (PEO), we take on full responsibility for payroll tax compliance, including: 

    • Collecting and processing Form W-4’s 
    • Calculating precise withholding amounts 
    • Filing quarterly and annual payroll tax returns 
    • Remaining up to date on changing regulations 

    This allows your team to focus on your core business operations while resting assured your payroll taxes are being managed accurately and on time. At GMS, we understand the challenges of remaining payroll tax compliant, especially when managing Form W-4s across a workforce. Our PEO services provide a comprehensive solution, ensuring proper withholdings and filings so you avoid penalties and audits. Contact us today to learn how our services can save you time and money while reducing risk! 

  • The complex calculations, meticulous record-keeping, and strict regulations make payroll a daunting task. As a small business owner, you’re already juggling numerous responsibilities, from managing daily operations to strategizing for growth. Using your valuable time on payroll can divert your attention from what’s most important – building your business.

    Streamlining payroll processing can help you reclaim your time while also ensuring your employees are paid accurately and on time. Integrated payroll services combine payroll processing with other essential business functions, such as HR and benefits administration. With integrated payroll processing, you can reduce administrative burdens, maintain compliance with tax and labor laws, and boost efficiency.

    The Challenges Of Payroll Management For Small Businesses

    Payroll management can be challenging for small business owners, impacting productivity and financial health. Manual calculations and record-keeping are tedious tasks that take up valuable time and resources.  That time adds up quickly, highlighting the substantial burden these processes can inflict.

    Not only are manual calculations time-consuming, but they can also lead to filing errors and compliance issues. Human errors in payroll processing can lead to serious consequences, including legal penalties and upset employees. In fact, 40% of small to mid-sized businesses are penalized by the Internal Revenue Service (IRS) due to inaccuracies in their payroll filings, incurring fines costing around $845. These complex regulations require extensive knowledge and attention to detail, as minor errors can be expensive.

    What Are Integrated Payroll Services?

    Integrated payroll services go beyond traditional payroll processing by also covering other critical business operations. This could include HR management for employees, timekeeping systems for accurate hour tracking, and benefits administration for health insurance and retirement plans. These comprehensive services consolidate all aspects of employee management into one system, eliminating the need for multiple platforms and reducing manual data entry. By integrating payroll with HR and other functions, businesses can save time and resources while enhancing accuracy.

    The Benefits Of Integrated Payroll Services

    Small businesses can gain significant advantages from integrated payroll solutions. From automating calculations to ensuring compliance, integrated payroll systems streamline payroll processing and simplify administrative tasks. You can expect the following when you utilize an integrated payroll service:

    Time savings

    When you use an integrated payroll service, you can save time and effort in managing payroll tasks. reducing the time spent on manual calculations. Data entry and processing are streamlined into a single platform, increasing operational efficiency. Integrated payroll services also provide real-time updates and reporting, allowing you to make swift decisions regarding your business and employees.

    Increased accuracy and compliance

    Integrated payroll greatly enhances accuracy and compliance in payroll management. By automating tax calculations and filings, these systems ensure that deductions and contributions are calculated correctly and submitted on time, reducing the risk of errors. Furthermore, integrated payroll services are designed to stay up to date with federal, state, and local regulations. This helps you remain compliant with the latest legal standards and protects your business from penalties and fees.

    Simplified HR management

    Alongside optimizing payroll, integrated payroll services incorporate crucial HR functions into the same system, simplifying HR management. Integrated payroll assists in facilitating data collection and employee benefits enrollment, making onboarding new hires a smooth process. They also improve the accuracy of time and attendance tracking by automatically recording work hours, leaves, and overtime. With combined systems, employees can easily manage their health insurance plans, retirement contributions, and other benefits, streamlining benefits administration.

    Cost efficiency

    Helping businesses save time and resources, integrated payroll services ultimately reduce overall expenses. By simplifying payroll and HR processes with automations, these systems minimize administrative overhead and reduce the need for dedicated payroll staff. With the accuracy of integrated payroll, businesses can also mitigate the risks of costly penalties due to human error. You can also adjust your integrated services based on the growth of your business, easily adding or removing features as needed without incurring extra costs.

    Enhanced employee experience

    Integrated payroll services aren’t just a great tool for business owners; they also provide numerous benefits for employees. Self-service portals allow employees to access their pay stubs, tax forms, and other important documents. Having this information provided transparently and readily available builds trust and limits the need for manual requests and inquiries.  Additionally, integrated payroll services can improve communication between employees, HR, and payroll departments by centralizing payroll and benefits information.

    What To Look For In An Integrated Payroll Service Provider

    Choosing the right integrated payroll service provider for your business requires careful consideration. An integrated payroll system should smoothly fit into your current operations, making it simpler and more efficient. Look out for the following features when searching for an integrated payroll service that suits your needs:

    • Automation and integration: The integrated payroll service you select should automate payroll processing, tax filings, and other HR tasks. It should also easily communicate data with your other tools or systems.
    • Compliance tools: Your integrated payroll system should receive automatic tax updates and have built-in compliance features for adhering to regulations and audits.
    • Employee self-service portals: Employees should be able to access paystubs, tax information, and benefits through a user-friendly self-service portal that lets them update personal details.
    • Flexibility for growth: As your business grows, your integrated payroll solution should also adapt, allowing you to adjust services as your needs evolve.

    How To Implement Integrated Payroll

    Once you’ve found the perfect fit for your business, begin integrating your new payroll system by planning and communicating the transition to your employees. Start by establishing a clear transition timeline and secure technical support to encourage an efficient rollout of your new integrated payroll system. Next, consider how your existing data will be migrated to the new integrated system. Your new service provider can help facilitate a smooth and accurate transfer of employee and payroll information. Additionally, ensure your employees are comfortable with the new system by providing training sessions that familiarize your team with the self-service portal and other functions.

    Payroll Management With GMS

    Managing payroll and keeping up with tax regulations can be a complex and time-consuming task for small business owners. A professional employer organization (PEO) like GMS can turn the burden of payroll management into a strategic advantage with our integrated HR solutions.

    GMS Connect, our fully integrated HR information system (HRIS) offers access to tools for payroll, benefits, HR, recruiting, performance management, and more. With GMS Connect, you can manage your business’s payroll and HR functions from anywhere, on any device with internet access.

    Our payroll processing services include a user-friendly online system for , streamlining your workflow. Once you input your payroll data, GMS experts handle all the details associated with filing taxes, from ongoing maintenance to compliance. Contact us today to transform your payroll management and HR operations!