Request a call Login

  • On January 1st, 2023, the Internal Revenue Service (IRS) increased the standard mileage rate for paid transportation expenses. The new mileage rate will be 65.5 cents per mile which is up three cents from the second half of 2022. All miles driven for medical or moving purposes will remain at 22 cents per mile, and mileage for charitable purposes will remain at 14 cents per mile. For additional information regarding the updated business standard mileage rate, click here.

    Understanding Mileage Reimbursement

    In most businesses, employers would provide company cars to salespeople and executives who traveled often for business purposes. The employer would also pay for the car’s expenses, including gas, insurance, and maintenance. Nowadays, if a company doesn’t provide vehicles for their employees, they should reimburse employees’ car expenses with mileage reimbursement. With mileage reimbursement, employees receive a set dollar amount for every mile they drive for business purposes. While reimbursing your employees for using their personal vehicles is not a federal requirement, it’s essential that you adopt such practices to keep your employees from using their savings to fund business expenses.

    The following are considered qualified mileage reimbursement costs:

    • Business trips
    • Off-site meetings with clients and prospective clients
    • Running errands for business supplies
    • Deliveries

    Fortunately, the IRS makes it easy for business owners to determine how much they should be reimbursing their employees. The IRS sets a mileage rate for these costs, which are not taxable to your employees and are a deductible for your business. Should you choose a higher rate, you and your employees pay payroll taxes on the extra amount.

    Utilize GMS To Help With These Decisions

    While providing your employees with mileage reimbursement isn’t necessary, it’s a way to attract employees and let them know you care about them. When you partner with GMS, you gain access to our fleet management program. This allows business owners to organize and coordinate work vehicles to improve efficiency, reduce costs, and monitor unsafe driving habits. If you’re a small business owner and don’t have a fleet of cars, our HR experts work with you to set up a program so you can reimburse your employees for qualified mileage reimbursement costs. Contact us today to learn more.

  • The tax rates used on Arizona’s withholding certificates are decreasing for 2023. The Arizona Department of Revenue (DOR) updated Form A-4 to reflect lower personal income tax rates. To view and download the updated form, click here.

    All employers in Arizona are required to make the 2023 version of Form A-4 available to their employees by January 31st, 2023. The DOR requires all employees to complete and submit a new Form A-4 for 2023. For any employee who fails to fill out the new form by February 15th, 2023, the default withholding rate will now be 2% instead of 2.7%. Federal Form W-4 is not an acceptable substitute for state withholding purposes.

    Stay Compliant, Partner With GMS

    Changing rules and regulations make it challenging to focus on growing your business. When you partner with GMS, you gain experts in all fields of your business, including HR, payroll, risk management, and benefits. We ensure you remain compliant and stay up to date on all new rules and regulations. Contact us today to learn more.

  • The Internal Revenue Service (IRS) announced the annual adjustments to the standard deduction and tax brackets for the 2023 tax year. 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 tax adjustments for 2023 are increased from 2022 in response to ongoing inflation. Continue reading to understand how the adjustments impact you and your employees.

    The Annual Adjustments For 2023

    The 2023 standard deductions for personal income taxes apply to the following:

    • Individuals: $13,850 in 2023, representing a $900 increase
    • Head of household: $20,800, a $1,400 increase
    • Married filing jointly: $27,700, a $1,800 increase

    In addition, the new tax brackets for personal income taxes apply as follows:

    • 10%: all income below $11,000 individual / $22,000 married
    • 12%: $11,000 individual / $22,000 married
    • 22%: $44,725 individual / $89,450 married
    • 24%: $95,375 individual / $190,750 married
    • 32%: $182,100 individual / $364,200 married
    • 35%: $231,250 individual / $462,500 married 
    • 37%: all income above $578,125 individual / $693,750 married

    Capital gains taxes have been adjusted as well. Capital gains are the profits you make when you sell a stock, real estate, or other taxable assets that increase in value while you own it. It’s based on profit and depends on the tax bracket. The capital gains brackets for 2023 are:

    • 0%: All earning below $44,625 individual / $89,250 married
    • 15%: $44,625 individual / $89,250 married
    • 20%: $492,300 individual / $553,850 married

    For in-depth details regarding the 2023 adjustments, click here. 

    What Your Employees Should Know

    The new tax brackets apply to all earnings starting January 1st, 2023. As an employee, you must be provided with the resources necessary to make the right decisions. The IRS provides a tax withholding estimator that assists individuals in determining if they have too much federal income tax withheld, which could reduce their take-home pay. Alternatively, it can help employees with additional income sources to decide whether to withhold more or make an estimated tax payment to avoid a tax bill. Employees can also submit the 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. In addition, the following could impact your employees’ decisions:

    • Determining how much salary to defer into a traditional 401(k) plan or a health savings account
    • Choosing if they want to participate in a nonqualified deferred income plan (if applicable)

    Utilize GMS’ Payroll Tax Management Services

    Tax planning can be complicated, and you shouldn’t do it alone. Payroll tax filing requirements are complex and ever-changing. Filing incorrectly can result in costly penalties. When outsourcing your payroll tax management to a company like GMS, your business will benefit in various ways. Do what’s best for you and your employees as we approach the new year. Contact us today to learn more.

  • Various cities and states have begun announcing the implementation of pay transparency. As of November 1st, New York City employers are required to disclose the salary range on job advertisements. Pay transparency must be placed on job advertisements rather than being placed only in offer letters or upon request of applicants or employees.

    The city’s law correlates with what has been picked up by other jurisdictions such as:

    • California
    • Colorado
    • Washington

    Start With Your Job Listings

    According to the Society for Human Resource Management (SHRM), employers with at least four employees must include the following in any advertisement for a job, promotion, or transfer opportunity:

    • Minimum annual salary
    • Maximum annual salary
    • Hourly range of compensation

    When it’s a commission-only position, employers are not required to post the exact salary. Instead, the posting can be satisfied by general statements. Employers are covered by stating the commission ranges. When writing job descriptions for your open positions, ensure they are direct and specific. It’s essential to provide the candidate with an understanding of the job by including the basic job functions.

    Rely On GMS

    As a business owner, it’s challenging to remain compliant when regulations constantly change. However, when you partner with GMS, our HR professionals have you covered. Our HR specialists are aware of changes as they occur within your state. In addition, our recruiting team can build competitive job descriptions that meet regulations to protect your business. GMS will also conduct market analyses to provide you with a pay range that aligns with your open positions. Learn more today!

  • The Temporary Worker’s Bill of Rights or, Senate Bill 511, is now being considered with revisions made by New Jersey Governor Phil Murphy. After originally vetoing this bill, he claimed to “wholeheartedly support the overarching objectives,” and proposed additional revisions. If the legislature accepts his revisions, Gov. Phil Murphy said he will sign it into law.

    The Temporary Worker’s Bill Of Rights

    Senate Bill 511 would require businesses to provide temporary workers with:

    • At least minimum wage
    • Equal benefits that are offered to their full-time employees

    In addition, the bill aims to address discriminatory workplace practices and promote gender and racial pay equity. Pay equity is the idea of compensating employees with similar job functions with comparably equal pay, regardless of gender, race, or ethnicity. This means that if two different jobs contribute equal value to their employer’s operations, then employees in those positions should be receiving equal pay.

    Temporary agencies would also be required to keep written records of pertinent employment information, including:

    • Location of the worksite
    • Number of hours worked
    • Rate of pay for each employee
    • A copy of any contract pursuant to which the temporary worker is performing work
    • Any deduction from the worker’s pay

    Should this bill pass, it would allow temporary employees to sue the temporary labor agency and the third-party company for violations of the bill. Any business or temporary agency that violates the bill will be subject to civil penalties, such as financial penalties, with each day of not complying constituting a separate offense.

    Additionally, Gov. Murphy proposed that this bill only applies to occupations that are most vulnerable to exploitation which include the following:

    • Construction labor
    • Security services
    • Cleaning
    • Landscaping
    • Food service
    • And more

    He also calls for one million dollars to be appropriated for the Department of Labor and Workforce Development which ensures vigorous enforcement of the new protections.

    GMS Is Here To Help!

    Managing payroll and tax filings can be a strenuous task for small business owners. When you partner with GMS, you can take full advantage of online payroll software to simplify your business and save you valuable time. GMS provides a comprehensive web-based payroll solution to ensure compliance, accuracy, and peace of mind. Our online payroll software allows you to complete payroll in minutes and manage and access payroll information anywhere there’s an internet connection. Contact us today if you’re ready to focus your time and energy on growing your business instead of spending hours on payroll processing.

  • At 2:00 a.m. on November 6th, 2022, daylight savings time ends. Daylight saving time (DST) is the practice of setting clocks forward one hour from standard time during the spring and summer months. In the fall, you set the clocks back an hour to use natural daylight more effectively. Continue reading to learn its effects on business owners.

    The Purpose Of Daylight Saving Time

    This practice became federal law in the United States when President Lyndon Johnson signed the Uniform Time Act in 1966. The idea behind daylight savings is to maximize sunlight in the Northern Hemisphere as days get longer in the spring. Individuals gain an extra hour of sunlight by springing forward their clocks and falling back. However, the benefits of this practice tend to be controversial, and the shift can have measurable impacts on health. As an employer, it’s essential that you understand the following considerations as we prepare to set our clock back on November 6th.

    The period from 1:00 a.m. to 2 a.m. 

    If you have employees working on November 6th at 2:00 a.m., you may be required to pay those employees for one additional hour of work. It’s only required if the time change extends the number of hours worked. The Fair Labor Standards Act (FLSA) states that all hourly employees must be paid for all hours worked. On this specific day, your employees will have worked the hour from 1:00 a.m. to 2:00 a.m. twice. As the employer, you could modify these employees’ start and end times to avoid this conflict.

    Overtime obligations to consider

    It might also count towards overtime compensation if you choose to pay your nonexempt employees for that additional hour of work between 1:00 a.m. and 2:00 a.m. This could result in a workweek of over 40 hours or a workday of over eight hours. Prior to November 6th, you must determine your employees’ overtime compensation for the day and week to ensure you comply accordingly.

    GMS Is Here To Help

    While you have probably tackled daylight saving time before, it’s essential that you comply with all rules and regulations. At GMS, we understand you don’t have the time to sit down and read a rule book of everything you must comply with. In addition, payroll management is a long and tiring process. Stop spending time worrying about payroll and start spending time growing your business. Partner with GMS so you can have that extra hour on November 6th. Contact us today.

  • The California minimum wage is increasing to $15.50 an hour for all employers beginning January 1st, 2023. This new rate reflects an adjustment to the large employer minimum wage, which is currently $15 an hour. Joe Stephenshaw, California’s Director of Finance, determined the increase based on inflation. For small business owners, it’s essential to know that your employee’s minimum wage will also be increased to $15.50 an hour instead of its current rate of $14.00 an hour.

    Since there has been an 8.3 percent increase in inflation over the past year, multiple states have implemented higher minimum wages. The cost of food, shelter, and medical services has increased significantly over the past few months. The price of basic staples, including eggs and bread, has spiked, straining household budgets. Raising minimum wage rates would improve the overall standard of living with a more feasible income level to survive these unprecedented times.

    The California Labor Code 

    The California Labor Code is a collection of civil law statutes for the State of California. It’s made up of statutes that govern the general obligations and rights of individuals within the jurisdiction of the State of California. Workers are entitled to various rights and protections under California labor law. As inflation has impacted many individuals, the California Labor Code established the schedule for minimum wage increases. This includes an annual adjustment based on inflation taking effect with the 2023 large employer minimum wage.

    Every year, there will be adjustments to the state minimum wage based on inflation, with the announcements made on August 1st. In addition, the California Labor Code requires all small employer minimum wage rates in 2023 to match the large employer minimum wage rate if inflation has exceeded 7%.

    What Small Business Owners Need To Know

    As a small business owner during these challenging times, you must ensure you stay on top of the ever-changing rules and regulations. In addition, your employees are your biggest asset. When you partner with GMS, we ensure you are paying your employees the correct amount each year. As inflation and the COVID-19 pandemic have affected many individuals and companies, numerous businesses have looked to increase their minimum wage prior. Our team ensures you offer the best possible wage to your employees, allowing you to attract and retain your top talent. Contact us today to learn more.

  • The Michigan Court of Claims ruled earlier this year that the legislature violated the Michigan Constitution in 2018 by enacting, and within the same session amending, two ballot initiatives:

    • One requiring higher minimum wages
    • One requiring paid sick leave

    The 2018 ballot initiative was originally designed to raise the state’s minimum wage between 60 and 75 cents yearly until it reached $12.00 in 2022. The initiative was then intended to tack the minimum wage to inflation. Since employers and the relevant state agencies may not be able to implement the changes required by its decision immediately, the court has extended its stay until February 20th, 2023.

    What Employers Should Know 

    Starting February 2023, the standard minimum wage in Michigan will increase from its current $9.87 per hour to at least $12.00 per hour. Because the original 2018 ballot initiative would have increased the standard minimum wage to $12.00 effective on January 1st, 2022, the amount could increase in February 2023. In addition, the minimum wage for tipped employees will increase from its current $3.75 per hour to at least $9.60 or even higher.

    Paid Sick Leave

    Under the Earned Sick Time Act, Michigan employers must provide their employees 72 hours of sick leave annually. For employers with at least 10 employees, all 72 hours of leave must be paid. Small employers are to provide at least 40 hours of paid sick leave annually, while the balance of the 72 hours of leave may be unpaid.

    Partnering With GMS For Payroll Administration 

    Payroll is costly in both money and time. You probably know how your payroll responsibilities impact your operational efficiencies and bottom line. Between tax calculations, payroll, compliance, and all other payroll functions, there’s an insufficient amount of time to manage it properly. Stay up to date with regulatory changes and ensure your employees are being paid correctly by partnering with GMS. Contact us today.

  • Under the Pennsylvania Minimum Wage Act (PMWA), the new state wage-and-hour regulations will take effect on August 5th for tipped and salaried nonexempt workers. The PNWA establishes a fixed minimum wage and overtime rate for employees in Pennsylvania. In addition, it sets forth compliance-related duties for the Department of Labor & Industry and employers. These changes align with additional federal regulations, including raising the tipped employees’ minimum wage to $7.25 an hour.

    New Regulation Requirements 

    Pennsylvania employers are now required to calculate the regular pay rate for salaried, nonexempt employees by adding all remuneration for the workweek and dividing this by 40 hours. In addition, to calculate the overtime pay due, the regular rate is:

    • Multiplied by 1.5
    • Then, multiplied by the number of hours worked more than 40 in that workweek

    The new formula for calculating overtime premiums for salaries of nonexempt employees is:

    • [(Weekly salary + any other remuneration not excluded under 34 Pa. Code § 231.43(a)) ÷ 40 hours] × 1.5 × OT hours = Total Overtime Owed

    This new formula for salaried nonexempt overtime workers is a departure from the Fair Labor Standards Act’s (FLSA) fluctuating workweek (FWW) method of calculating overtime premium pay for salaried nonexempt employees.

    What This Means

    Pennsylvania’s new formula for calculating overtime pay for salaried nonexempt employees was created to be more protective for workers. In addition, it will result in greater overtime pay for employees than before with the federal FWW formula. All employers in Pennsylvania should consider re-evaluating whether their practices comply with the new PNWA formula.

    Is It Time For Your Business To Invest In Payroll Outsourcing Services?

    It’s no secret that payroll management is a long and tiring process, not to mention keeping up with new regulations you must comply with. If you’re struggling, it’s time to consider outsourcing payroll administration to a professional employer organization (PEO) such as GMS. Contact us today.

  • As a business owner, you’re going to have to deal with a seemingly endless number of payroll obligations. Managing payroll for a small business isn’t easy, especially when it comes to dealing with payroll taxes.

    Between calculating payroll taxes and filling out numerous forms, approximately 40% of small businesses spend more than 80 hours per year managing the payroll tax process. That’s a lot of time, especially when it’s not always clear whether an employer should use Form 941 or 944 to report their payroll taxes. Keep reading to learn the difference between these forms and which is right for your business.

    What Is Form 944?

    Form 944 is the annual federal tax return that certain small businesses use to report employment taxes. Employers use Form 944 to report:

    • Wages you have paid
    • Tips your employees reported to you
    • Federal income tax withheld
    • Both the employer and the employee share of social security and Medicare taxes
    • Additional Medicare Tax withheld from employees
    • Current year’s adjustments to social security and Medicare taxes for fractions of cents, sick pay, tips, and group-term life insurance
    • Qualified small business payroll tax credit for increasing research activities

    Note: While the Federal Unemployment Tax Act (FUTA) is also considered a payroll tax, employers should use Form 940 to report their federal unemployment tax contributions.

    However, the following employers can’t file Form 944:

    • Household employers
    • Agricultural employers
    • Employers who are notified by the Internal Revenue Service (IRS) to file quarterly Forms 941
    • Employers who aren’t notified to File form 944

    This form is generally used by small business employers with an estimated annual payroll tax liability of $1,000 or less.

    New employers can request to file 944 tax forms when they apply for an employer identification number (EIN). If a business has previously filed 941 forms, they can submit a request to the IRS to file Form 944 instead. For more info, check out IRS.gov for instructions on how to request a 944 form.

    What Is Form 941?

    Form 941 is a quarterly federal tax return used by most employers to report the same employment taxes. Most businesses file Form 941 unless the IRS has notified them that they qualify for the annual filing option via Form 944.

    Key Differences Between Form 941 And Form 944

    Below is a summary table outlining the key distinctions:

    Who should file?

    • Form 941: Employers with an estimated annual tax liability of more than $1,000
    • Form 944: Small business employers with an annual tax liability of $1,000 or less

    When to file:

    Form 941: Due quarterly on:

    • April 30
    • July 31
    • October 31
    • January 31

    Form 944: Due annually by January 31.

    Tax Deposit Requirements:

    Form 941:

    • If total taxes are less than $2,500 per quarter, deposit taxes when you file the form
    • If the tax liability is $50,000 or less, deposits are made monthly (due by the 15th of the following month)
    • If more than $50,000, deposits are made semiweekly based on your payday schedule

    Form 944:

    • If annual tax liability is less than $2,500, payment is made filing Form 944.
    • If annual liability exceeds $2,500 but each quarter remains under that threshold, payment is due by the last day of the month following the end of the quarter
    • If a quarter’s liability is $2,500 or more, deposits follow the monthly or semiweekly guidelines

    Note: Regardless of the deposit schedule, the IRS recommends using the Electronic Federal Tax Payment System (EFTPS).

    Should You Switch Your Filing Requirement?

    New guidance from the IRS provides flexibility for businesses whose estimated tax liability does not match their current filing requirement. Consider the following:

    • If you currently file Form 944 but estimate your annual tax liability will be more than $1,000, you may be eligible to switch to filing Form 941
    • If you currently file Form 941 but expect your annual tax liability to be $1,000 or less, you may be eligible to switch to Form 944

    To request a change:

    • Send a written request postmarked by March 15
    • Call the IRS at 800-829-0115 by April 1

    For more detailed instructions or to initiate a change, visit IRS.gov.

    What Information Do You Need To File Forms 941 And 944?

    Although the total tax thresholds are different, both 944 and 941 tax forms require businesses to provide the same types of information. Any business filing these tax forms must report the following information to the IRS.

    • Employer information (e.g., EIN, name, and address)
    • Total number of employees that were paid
    • Employee compensation (wages, tips, and anything else paid to employees)
    • The amount of federal income tax, Social Security tax, and Medicare tax paid by the business and withheld from employees
    • Total amount of tax liability
    • Paid sick or family leave wages, if applicable
    • Consolidated Omnibus Budget Reconciliation Act (COBRA) information, if applicable
    • Any necessary adjustments

    How To File Forms 941 And 944

    The IRS gives businesses two ways to file Forms 941 and 944:

    • By mail
    • E-filing

    There are different mailing addresses for businesses depending on their location, special exemptions, and whether the business is deciding to file and pay their payroll taxes at the same time. Fortunately, the IRS lists out every possible scenario on their website:

    Businesses that want to e-file payroll tax forms can also choose to do so online. This process is not only quicker, but also more secure. Employers can choose to e-file Forms 941 or 944 on their own or have a tax professional submit these forms on their behalf. The IRS provides guidelines for how to e-file Forms 941 and 944 on their website.

    Forms 941 and 944 ready to be filled out.

    Correcting Mistakes On Your Payroll Tax Forms

    At some point, you might discover an error on a filed Form 941 or Form 944. The IRS allows you to correct errors by filing:

    • Form 941-X: To correct mistakes on a previously filed Form 941
    • Form 944-X: To correct mistakes on a previously filed Form 944

    The deadlines for corrections depend on whether you underreported or overreported your taxes. Consult the IRS guidelines for detailed deadlines and procedures.

    Streamline Your Payroll Process

    Managing payroll taxes, and choosing the right form, can be complex and time-consuming. At Group Management Services (GMS), we help you navigate these complexities by:

    • Ensuring you use the correct form based on your tax liability
    • Keeping you up-to-date on IRS deadlines and filing requirements
    • Assisting with electronic filing and tax deposit scheduling

    By streamlining your payroll processes, you can save valuable time and reduce the risk of IRS penalties, leaving you free to focus on growing your business.

    How GMS Can Help

    At GMS, we understand that payroll and tax compliance can be overwhelming. Our comprehensive solutions include:

    • Payroll & tax compliance: We handle all of your payroll processing and tax filing needs accurately and on time
    • Expert human resources (HR) support: Our team stays current on federal requirements so that your business is always compliant
    • Customized service: We work with businesses of all sizes nationwide, ensuring you have the support you need to simplify your operations

    Contact GMS here and let us help you take control of your payroll and focus on what really matters, growing your business.