Workful payroll tutorial

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Managing payroll can feel like a labyrinth, right? You’re trying to grow your business, serve your customers, and then comes the mountain of deductions, taxes, and compliance.

If you’ve been eyeing Workful as a solution, this tutorial is your direct answer.

Workful streamlines the often-complex world of payroll, offering a user-friendly platform designed to take the headache out of paying your team, managing benefits, and staying on top of tax filings.

We’re going to break down how to get set up, run payroll, and leverage its features to ensure your employees are paid accurately and on time, all while keeping your business compliant and efficient.

Table of Contents

Getting Started with Workful: The Foundation

Alright, let’s cut to the chase.

Before you can start paying anyone, you need to lay the groundwork in Workful.

Think of this as building the house before you invite guests over.

A solid setup ensures fewer headaches down the line.

It’s crucial to get this right, especially when dealing with financial transactions that impact your employees’ livelihoods and your business’s compliance. Workful pto tracking

Setting Up Your Company Profile

This is step one, and it’s non-negotiable. Workful needs to know who you are.

This involves plugging in your core business information.

  • Company Name and Address: Make sure it matches your legal business registration exactly.
  • Federal Employer Identification Number FEIN: This is your business’s social security number for tax purposes. If you don’t have one, you’ll need to apply for it through the IRS. In 2023, the IRS reported issuing over 3.7 million new FEINs to businesses and organizations. Don’t skip this.
  • State Tax IDs: This is where things can get a bit tricky depending on where you operate. Each state has its own requirements for unemployment insurance and withholding taxes. For instance, California requires a State Employer Identification Number SEIN and an Employment Training Tax ETT number. Always double-check your state’s specific requirements. A quick search on your state’s Department of Labor or Revenue website will give you the precise details.
  • Bank Account Information: This is critical. Workful needs to know where to pull funds from to pay your employees and where to remit your payroll taxes. You’ll typically provide your bank’s routing number and your business checking account number. Always use a dedicated business bank account for payroll. Mixing personal and business funds can lead to a messy situation and potential IRS issues. According to a 2022 survey, small businesses that separate personal and business finances are 40% less likely to face auditing discrepancies.

Inviting and Onboarding Employees

Once your company profile is squared away, it’s time to bring your team into the system. Workful makes this pretty slick.

  • Employee Information: You’ll input basic details like their full name, contact information, and hire date. This might seem obvious, but accuracy here prevents miscommunications and compliance issues.
  • Tax Withholding W-4: Workful allows employees to complete their W-4 forms digitally. This is huge. The W-4 dictates how much federal income tax should be withheld from their paychecks. An incorrectly filled W-4 can lead to employees owing significant taxes at year-end or receiving a smaller refund than expected. Encourage your employees to review their W-4 annually or whenever life events change marriage, new child, etc..
  • Direct Deposit Information: Most employees prefer direct deposit, and it’s far more efficient for you. They’ll input their bank’s routing number and account number. Workful typically has a pre-note period a small test transaction to verify account details, which is a good safeguard against errors.
  • Worker Classification: This is a crucial distinction. Are your workers employees or independent contractors 1099? The IRS has strict guidelines for this. Misclassifying employees as independent contractors can lead to hefty penalties, back taxes, and legal challenges. In 2022, the U.S. Department of Labor recovered over $140 million in back wages due to worker misclassification. If you’re unsure, consult with a payroll specialist or an attorney.

Setting Up Pay Schedules and Frequencies

This defines when and how often your employees get paid. Consistency is key here.

  • Weekly, Bi-weekly, Semi-monthly, or Monthly: Choose the schedule that best fits your business operations and employee expectations. Bi-weekly is very common, meaning 26 pay periods per year. Semi-monthly means 24 pay periods, typically on the 15th and last day of the month.
  • Pay Period End Dates: This is the last day of the work period for which employees are being paid.
  • Pay Dates: This is the actual date funds will be disbursed to employees. It’s usually a few days after the pay period end date to allow for processing.
  • Consider State Laws: Some states have specific laws regarding pay frequencies. For example, in New York, manual workers must be paid weekly. Always check your state’s labor laws to ensure compliance.

Running Your First Payroll: The Nitty-Gritty

Once you’ve got your foundation poured and cured, it’s time for the main event: running payroll. Workful payroll tax calculator

Workful aims to simplify this, but understanding each step ensures accuracy and peace of mind.

Remember, every dollar matters, both to your employees and to your bottom line.

Entering Hours and Wages

This is where the actual work data comes in.

Workful offers flexibility depending on how you track time.

  • Manual Entry: If you’re a smaller operation or use external time tracking, you can simply input the total regular hours, overtime hours, and any other specific wage types directly into Workful for each employee.
  • Timesheet Integration: Workful often integrates with its own time tracking system or third-party apps. If employees clock in and out using Workful’s time clock feature, those hours will automatically populate, drastically reducing manual errors. Data from the American Payroll Association suggests that automated time tracking can reduce payroll errors by up to 80%.
  • Salaried Employees: For salaried employees, their regular wages typically remain constant unless there’s a pay change or an unpaid leave of absence. You’ll just need to ensure their default salary is correctly entered.
  • Commissions, Bonuses, and Tips: Don’t forget to add these.
    • Commissions: Often added as a one-time payment or calculated based on sales data.
    • Bonuses: Typically one-time payments. Remember that bonuses are subject to federal income tax withholding, often at a flat rate of 22% for supplemental wages under $1 million.
    • Tips: If your employees receive tips, ensure they are properly reported. For cash tips over $20 per month, employees must report them to you, and you must withhold taxes.

Reviewing and Approving Payroll

This is perhaps the most critical step. Do not skip this. Ever. A single error here can lead to unhappy employees, fines, and administrative headaches. Gust0

  • Gross Wages: Check that the total earnings for each employee regular hours + overtime + bonuses + commissions, etc. are correct.
  • Deductions: Review all deductions.
    • Pre-tax Deductions: These reduce an employee’s taxable income. Examples include 401k contributions, health insurance premiums under a Section 125 plan, and Flexible Spending Account FSA contributions. In 2023, the maximum employee contribution to a 401k was $22,500.
    • Post-tax Deductions: These are taken after taxes are calculated. Examples include Roth 401k contributions, garnishments, and certain union dues.
  • Employer Contributions: Don’t forget your share! This includes employer portions of FICA Social Security and Medicare, unemployment taxes FUTA and SUTA, and any employer-sponsored benefits like 401k matches or health insurance. The employer FICA rate is 7.65% 6.2% for Social Security up to the annual wage base, and 1.45% for Medicare with no wage base limit.
  • Net Pay: This is what your employees actually receive. Make sure it looks reasonable. If it’s drastically different from what’s expected, investigate immediately.
  • Review Reports: Workful will generate a payroll register or summary report. Print it, review it, and have a second pair of eyes check it if possible, especially for your first few payroll runs. Catching errors before submission is far easier and less costly than fixing them afterward.

Submitting Payroll

Once you’ve meticulously reviewed everything and given your final approval, you hit the “submit” button.

  • Processing Time: Workful, like most payroll providers, requires a certain number of business days for processing. Typically, this is 2-4 business days. So, if your pay date is Friday, you might need to submit by Tuesday or Wednesday. Always be aware of banking holidays, as they can extend processing times.
  • Funds Debited: On the processing day, Workful will typically debit your bank account for the net pay, employee tax withholdings, and your employer tax contributions. Ensure you have sufficient funds available to avoid rejected payments and potential fees.
  • Direct Deposit: Funds will then be directly deposited into your employees’ accounts on the scheduled pay date.
  • Pay Stubs: Workful automatically generates digital pay stubs for your employees, which they can access through their Workful portal. This transparency is crucial for employees to understand their earnings and deductions.

Tax Filing and Compliance: Staying on the Right Side of the Law

This is where many businesses get tripped up, and where a good payroll system like Workful truly shines. Tax compliance isn’t just about paying taxes. it’s about paying the right amount at the right time to the right agencies. Failure to do so can result in hefty penalties, interest charges, and even legal action.

Understanding Payroll Taxes

Payroll taxes are generally comprised of several components, both federal and state.

  • Federal Payroll Taxes:
    • FICA Federal Insurance Contributions Act: This funds Social Security and Medicare. Both employees and employers pay FICA taxes.
      • Social Security: 6.2% for employees and 6.2% for employers on wages up to the annual wage base $168,600 for 2024.
      • Medicare: 1.45% for employees and 1.45% for employers on all wages no wage base limit. There’s an additional Medicare tax of 0.9% on wages over certain thresholds $200,000 for single filers, $250,000 for married filing jointly paid only by the employee.
    • Federal Unemployment Tax Act FUTA: This is an employer-only tax that helps fund unemployment benefits. The federal FUTA tax rate is 6% on the first $7,000 of each employee’s wages. However, most employers receive a credit of up to 5.4% for state unemployment taxes paid, bringing the effective federal rate down to 0.6% in most cases.
    • Federal Income Tax Withholding: This is money withheld from employees’ paychecks based on their W-4 forms and remitted to the IRS on their behalf.
  • State Payroll Taxes:
    • State Income Tax Withholding: Many states have their own income tax.
    • State Unemployment Insurance SUI/SUTA: This is an employer-only tax that funds state unemployment benefits. Rates vary significantly by state and by employer based on their “experience rating” how many former employees have filed for unemployment. New businesses usually start with a standard rate.
    • State Disability Insurance SDI: A few states California, Hawaii, New Jersey, New York, Rhode Island, Washington have mandatory employee-paid disability insurance.
    • Local Taxes: Some cities or counties impose their own income or payroll taxes. For example, cities in Ohio and Pennsylvania often have local income taxes.

Workful’s Role in Tax Remittance and Filing

This is where Workful earns its keep.

A good payroll service automates the headache of tax payments and form submissions. Best hr and payroll systems

  • Automated Tax Payments: Workful typically handles the calculation, withholding, and remittance of all federal, state, and local payroll taxes directly to the appropriate government agencies. This means less manual work and a lower risk of missing deadlines. According to the IRS, approximately 10% of small businesses incur penalties related to payroll tax errors annually. Automating this reduces that risk significantly.
  • Quarterly Filings 941, State Forms:
    • Form 941 Employer’s Quarterly Federal Tax Return: This form reports federal income tax withheld, and both employer and employee shares of Social Security and Medicare taxes. Workful will prepare and file this for you each quarter.
    • State Quarterly Wage Reports: Similar to the 941, states require quarterly reports detailing wages paid and unemployment taxes. Workful handles these submissions.
  • Annual Filings W-2, W-3, 1099-NEC:
    • W-2s Wage and Tax Statement: By January 31st each year, you must provide a W-2 to every employee who was paid wages. Workful will generate and distribute these, and then electronically file them with the Social Security Administration SSA.
    • W-3 Transmittal of Wage and Tax Statements: This is a summary form that accompanies all W-2s when filed with the SSA. Workful handles this.
    • 1099-NEC Nonemployee Compensation: If you paid independent contractors $600 or more in nonemployee compensation during the year, you must issue them a 1099-NEC by January 31st. Workful can help generate and file these if you’ve tracked your contractor payments through the system.

Avoiding Penalties and Common Pitfalls

Even with automation, staying vigilant is key.

  • Know Your Deadlines: While Workful automates much of it, understanding the general deadlines e.g., quarterly returns due by April 30, July 31, October 31, and January 31 helps you spot potential issues.
  • Sufficient Funds: Ensure your payroll bank account always has enough money to cover tax debits. Insufficient funds can lead to rejected payments and penalties.
  • Accurate Employee Data: Incorrect Social Security numbers or addresses on employee W-4s can cause IRS discrepancies down the line. Regularly verify employee information.
  • State-Specific Nuances: Some states have unique payroll tax requirements or local taxes that need attention. Workful generally covers these, but it’s good to be aware. For example, Oregon and New York have unique Paid Family Leave contributions.
  • Maintain Records: Even with digital systems, it’s wise to keep digital copies of payroll reports, tax filings, and employee records. The IRS recommends retaining employment tax records for at least four years.

Managing Employee Benefits and Deductions: Beyond the Paycheck

Payroll isn’t just about paying wages.

It’s also about managing the often-complex world of employee benefits and other deductions.

Offering benefits can significantly impact employee satisfaction and retention.

A 2023 survey found that 60% of employees consider benefits packages “extremely important” when evaluating a job offer. Workful helps you administer these efficiently. Online payroll solution

Health Insurance and Retirement Plans

These are often the most significant benefits offered.

  • Health Insurance Premiums Pre-Tax vs. Post-Tax:
    • Pre-tax: Most commonly, health insurance premiums are deducted pre-tax under a Section 125 Cafeteria Plan. This reduces the employee’s taxable income for federal income tax, Social Security, and Medicare purposes, leading to a higher net pay for the employee and reduced FICA tax for both employee and employer. Workful can set up these deductions to be calculated automatically.
    • Post-tax: Less common for employer-sponsored plans but may apply in specific situations or for certain voluntary benefits.
  • Retirement Plans 401k, IRA, SIMPLE IRA, SEP IRA:
    • Employee Contributions: Workful allows you to set up recurring deductions for employee contributions to various retirement plans. You’ll need to specify whether they are pre-tax traditional 401k or post-tax Roth 401k.
    • Employer Contributions/Matching: If your company offers a 401k match or other employer contributions, Workful can track and apply these contributions, ensuring they are correctly reported on the W-2.
    • Integration with Providers: Many payroll systems, including Workful, integrate with common 401k plan administrators, streamlining the transfer of contribution data. This integration reduces manual errors and ensures timely funding of retirement accounts.

Other Voluntary and Involuntary Deductions

Beyond health and retirement, many other deductions might appear on a paycheck.

  • Life Insurance: If offered through the employer, premiums can be deducted. Group-term life insurance coverage up to $50,000 is typically tax-free. coverage above that amount is taxable as imputed income.
  • Disability Insurance: Both short-term and long-term disability premiums can be deducted, often on a post-tax basis if the benefits are to be tax-free for the employee.
  • Flexible Spending Accounts FSAs and Health Savings Accounts HSAs:
    • FSAs: Pre-tax deductions used for qualified medical expenses or dependent care. They are “use-it-or-lose-it” with some carryover exceptions. For 2024, the maximum health FSA contribution was $3,200.
    • HSAs: Pre-tax deductions, but unlike FSAs, funds roll over year to year and are portable. Employees must be enrolled in a high-deductible health plan HDHP to be eligible. For 2024, maximum self-only contributions were $4,150, and family contributions were $8,300. Workful can facilitate these deductions.
  • Loan Repayments: If you offer employee loans e.g., relocation loans, emergency loans, Workful can set up automated deductions for repayment.
  • Garnishments: These are legally mandated deductions, often for child support, alimony, or tax levies. These are non-negotiable and must be handled with extreme precision. Workful typically has features to manage garnishment orders, ensuring the correct amounts are withheld and remitted to the appropriate agencies. Failure to comply can lead to severe legal penalties for the employer. In 2022, over 7.5 million wage garnishment orders were issued in the U.S.

Setting Up and Managing Deductions in Workful

  • Create Deduction Types: Workful allows you to define various deduction types e.g., “Health Premium,” “401k Pre-tax,” “Child Support Garnishment”.
  • Assign to Employees: Once a deduction type is created, you assign it to the relevant employees, specifying the amount or percentage to be withheld each pay period.
  • Effective Dates: Set start and end dates for deductions e.g., a 401k election starts on a specific date, or a garnishment order has a clear end.
  • Priority: For multiple deductions, especially garnishments, ensure Workful allows you to set priority. Federal law, like the Consumer Credit Protection Act CCPA, dictates the priority of certain garnishments.
  • Reporting: Workful should provide reports that clearly show all deductions taken, ensuring transparency for employees and compliance for your business.

Time Tracking and PTO Management: Maximizing Efficiency

Efficient time tracking and streamlined PTO management are crucial for accurate payroll and for maintaining a happy and productive workforce.

Workful often offers integrated solutions that tie directly into your payroll process, reducing manual input and potential errors.

Workful’s Time Clock Features

If you’re using Workful’s integrated time tracking, you’re looking to simplify data collection. Switching payroll providers mid year

  • Employee Clock-in/out: Employees can typically clock in and out using a web browser, a mobile app, or a physical time clock device if Workful offers one. This creates a precise record of their work hours.
  • Geofencing and IP Restrictions: For remote teams or on-site workers, geofencing allowing clock-ins only from a specific geographic area or IP restrictions allowing clock-ins only from your office network can enhance accuracy and prevent “buddy punching.” A survey by the American Payroll Association found that manual time tracking can inflate payroll costs by 1.5% to 5% due to inaccurate reporting.
  • Breaks and Overtime: The system should automatically track paid and unpaid breaks, and calculate overtime based on federal and state labor laws. Remember, federal law Fair Labor Standards Act – FLSA generally mandates time-and-a-half for hours worked over 40 in a workweek for non-exempt employees. Many states have daily overtime rules as well e.g., California requires overtime for hours over 8 in a day.
  • Manager Approval: Managers can review and approve employee timesheets before they are sent to payroll. This crucial step catches discrepancies and ensures accuracy before wages are processed.

Managing Paid Time Off PTO

PTO Paid Time Off encompasses sick leave, vacation, and personal days.

  • Accrual Policies: Workful can set up and track various PTO accrual methods:
    • Per Pay Period: Employees earn a set amount of PTO each pay period e.g., 4 hours per bi-weekly pay period.
    • Annually: Employees are granted a lump sum of PTO at the beginning of the year.
    • Anniversary Date: PTO is granted on the employee’s work anniversary.
    • Unlimited PTO: While sounding simple, this requires careful tracking of actual days taken for reporting purposes, though no accrual is needed.
  • Carryover Rules: Many companies have rules about how much unused PTO can carry over to the next year e.g., “up to 80 hours can carry over”. Workful should be able to enforce these rules.
  • Usage Tracking: Employees can request time off through Workful, and managers can approve or deny requests. The system automatically deducts approved time from their available balance.
  • State and Local Sick Leave Laws: This is a major compliance area. Many states e.g., California, New York, Massachusetts and numerous cities have mandatory paid sick leave laws, which dictate accrual rates, permissible uses, and carryover rules. Workful’s ability to configure these specific rules is essential for compliance. For instance, California’s paid sick leave law generally requires 1 hour of sick leave for every 30 hours worked, with specific caps on use and accrual.
  • PTO Payouts: Understand your state’s laws regarding PTO payout upon termination. Some states require all accrued, unused vacation time to be paid out, while others do not.

Integrating Time and PTO with Payroll

The magic happens when time tracking and PTO are seamlessly integrated with payroll.

  • Automatic Import: Approved hours from the time clock and approved PTO requests are automatically imported into the payroll run, eliminating manual data entry.
  • Accuracy: This automation significantly reduces the likelihood of errors, saving time and preventing over- or underpayments.
  • Reporting: Workful provides comprehensive reports on hours worked, overtime, PTO accruals, and usage, giving you valuable insights into labor costs and employee attendance patterns. For example, you can easily pull reports showing total overtime hours by department or individual, helping you manage labor expenses.

Reporting and Analytics: Unlocking Business Insights

Beyond just processing payments, a robust payroll system like Workful offers powerful reporting and analytics capabilities. These aren’t just fancy features.

They are essential tools that can provide deep insights into your labor costs, compliance, and overall business health.

Think of it as your financial dashboard for everything employee-related. Estimate employer payroll taxes

Essential Payroll Reports

Workful should offer a suite of standard reports that are crucial for various business functions.

  • Payroll Register/Summary: This is your detailed transaction log for each payroll run. It shows gross wages, all deductions pre-tax, post-tax, employer taxes, and net pay for every employee. This report is invaluable for reconciliation and auditing purposes.
  • Tax Liability Reports: These reports detail the amounts withheld and owed for federal, state, and local payroll taxes FICA, FUTA, SUTA, income tax withholding. They help you verify the amounts Workful is remitting on your behalf and ensure you have sufficient funds available.
  • Wage & Hour Reports: These provide a breakdown of regular hours, overtime hours, and different pay types e.g., commissions, bonuses. Useful for analyzing labor distribution and identifying overtime trends.
  • Deduction Reports: Itemize all employee and employer deductions and contributions, such as health insurance premiums, 401k contributions, and garnishments. Critical for reconciling with benefit providers and ensuring proper remittance.
  • PTO Accrual & Usage Reports: Tracks how much PTO employees have accrued, how much they’ve used, and their remaining balances. Essential for managing leave liabilities and ensuring compliance with leave laws.
  • General Ledger Report: This report is formatted in a way that makes it easy to integrate your payroll data directly into your accounting software e.g., QuickBooks, Xero. It typically shows debits and credits for various accounts wages expense, payroll tax expense, cash, accrued payroll taxes payable.

Leveraging Analytics for Strategic Decisions

The real power comes from moving beyond basic reporting to using the data for informed decision-making.

  • Labor Cost Analysis:
    • Cost Per Employee: Track the total cost of an employee salary + benefits + employer taxes to understand your true labor burden.
    • Departmental/Project Costing: If you’re assigning employees to departments or projects, Workful may allow you to run reports showing labor costs by department/project. This helps you allocate resources more effectively and assess profitability. For example, a restaurant might analyze labor costs for front-of-house versus back-of-house staff.
    • Overtime Trends: Identify departments or individuals consistently working excessive overtime. This could indicate understaffing, inefficient processes, or poor time management. A 2023 study found that managing overtime effectively can reduce labor costs by 15-20%.
  • Budgeting and Forecasting: Historical payroll data is indispensable for accurate budgeting. You can forecast future labor costs based on expected headcount changes, wage increases, and benefit plan changes.
  • Compliance Audits: Having easily accessible and comprehensive reports makes internal audits and external compliance reviews e.g., IRS, Department of Labor much smoother. Quick access to historical W-2s, 941s, and detailed payroll registers is a lifesaver during an audit.
  • Employee Compensation Strategy: Analyze average wages, benefits utilization, and turnover rates from payroll data. This can inform your compensation strategy, helping you stay competitive in the job market and retain top talent.

Customization and Export Options

A good payroll system lets you tailor your data.

  • Custom Report Fields: Look for the ability to customize reports by adding or removing specific data fields to get exactly the information you need.
  • Filtering and Sorting: Filter reports by date range, employee, department, or pay type to zero in on specific data sets.
  • Export Formats: The ability to export reports into common formats like Excel .xlsx, CSV, or PDF is essential for further analysis, sharing with accountants, or record-keeping. Most accounting professionals prefer Excel for easy manipulation.

Integrations and Ecosystem: Connecting Your Business Tools

The true power of a platform like Workful is often amplified by its ability to integrate with other essential business tools.

This creates a cohesive ecosystem, automating data flow, reducing manual entry, and minimizing errors across your operations. Workful expense tracking

Accounting Software Integration

This is arguably the most critical integration for any payroll system.

  • General Ledger GL Mapping: Workful should allow you to map payroll data directly to your chart of accounts in your accounting software. For instance, wages expense goes to your “Salaries Expense” account, employer taxes to “Payroll Tax Expense,” and net pay to “Payroll Payable” before it’s paid out.
  • Automated Journal Entries: Instead of manually inputting payroll journal entries after each pay run, Workful can generate and often directly push these entries into your accounting software. This saves hours of manual work and eliminates transcription errors. Popular integrations often include:
    • QuickBooks Online: A dominant force in small business accounting. Seamless integration means your payroll expenses are automatically categorized and updated in QBO.
    • Xero: Another popular cloud-based accounting solution for small businesses.
    • FreshBooks: Often favored by freelancers and service-based businesses.
    • Sage: For larger small to mid-sized businesses.
  • Benefits:
    • Time Savings: No more manual data entry or reconciliation between systems.
    • Accuracy: Reduces human error associated with re-keying numbers.
    • Real-time Financial Picture: Your financial statements P&L, Balance Sheet will reflect accurate and up-to-date labor costs, giving you a clearer picture of your profitability. According to a 2022 survey, businesses using integrated accounting and payroll software save an average of 8-10 hours per month on financial tasks.

Time Tracking Software Integration

While Workful often has its own time tracking, some businesses prefer or already use a specialized system.

  • Third-Party Time Clocks: If you use a system like Homebase, When I Work, or TSheets QuickBooks Time for advanced scheduling, geofencing, or specific industry needs, Workful should have the capability to import approved hours.
  • API Application Programming Interface Access: For more advanced users or custom solutions, Workful might offer an API that allows you to build direct connections with other internal systems or niche software.
    • Flexibility: Use the best-of-breed time tracking solution for your specific needs.
    • Efficiency: Automated import of hours streamlines the payroll process, reducing manual review and input.

HR Software Integration

As businesses grow, HR functionalities expand beyond just payroll.

  • Employee Data Sync: Integration with an HRIS Human Resources Information System like BambooHR, Gusto for their HR features, or Paylocity can ensure that employee data new hires, terminations, pay rate changes, personal information is consistent across both systems. This reduces data entry duplication and ensures compliance with HR record-keeping.
  • Benefits Management: Some HR platforms excel at benefits enrollment and administration. An integration can ensure that benefit deductions set up in the HR system are automatically reflected in payroll.
  • Onboarding: Streamlined onboarding processes where new employee data entered once in the HR system flows to payroll and other relevant systems.

Other Potential Integrations

Depending on your industry and specific needs, other integrations might be valuable.

  • Point-of-Sale POS Systems: For retail or hospitality, integration could pull sales data for commission calculations or tip reporting.
  • Project Management Software: For service businesses, integrating with project management tools could help allocate labor costs to specific projects for better profitability analysis.
  • Benefits Brokers/Providers: Direct feeds to health insurance carriers or 401k plan administrators to update employee eligibility or contribution changes.

Best Practices and Tips for Seamless Payroll Management

Even with a powerful tool like Workful, your approach to payroll can make all the difference. Online employee payroll

Think of these as the Tim Ferriss “hacks” for optimizing your payroll process – small changes that yield significant results, ensuring accuracy, compliance, and peace of mind.

1. Establish a Clear Payroll Schedule and Stick to It

  • Consistency is King: Employees rely on predictable paydays. Missing a payment or delaying it can severely impact morale and trust. Once you’ve set your pay frequency weekly, bi-weekly, semi-monthly, monthly, communicate it clearly and adhere to it.
  • Buffer Time: Always build in a buffer of at least 2-3 business days between your pay period end date and your actual pay date. This allows sufficient time for:
    • Managers to review and approve timesheets.
    • Payroll staff to input any manual adjustments bonuses, commissions.
    • Workful to process the direct deposits and initiate tax payments. Bank processing times can sometimes be unpredictable, especially around holidays. For instance, processing usually takes 2 business days, but if you have a Monday pay date, you’ll need to submit by Thursday of the prior week.

2. Implement Strong Internal Controls

  • Separation of Duties: If possible, avoid having one person responsible for the entire payroll process time tracking, approval, processing, reconciliation. For example, have managers approve timesheets, and a separate person review the final payroll register before submission. This reduces the risk of fraud and errors. A 2022 Association of Certified Fraud Examiners ACFE report showed that companies with weak internal controls experience fraud losses that are 50% higher.
  • Review and Reconcile:
    • Before Submission: Always review the payroll register thoroughly before submitting. Check gross wages, deductions, and net pay for accuracy. Look for anomalies.
    • After Processing: Reconcile your bank statement with the payroll debits. Ensure the amounts Workful debits match your payroll reports.
  • Audit Trail: Workful, like other payroll systems, should maintain an audit trail. Understand how to access it to track who made changes and when.

3. Prioritize Employee Data Accuracy

  • Initial Setup: Ensure all employee demographic data name, address, SSN and tax withholding information W-4 is correct from day one. Incorrect SSNs can lead to issues with W-2 filings and potential IRS notices.
  • Updates: Have a clear process for employees to submit changes new address, marital status, direct deposit info. Encourage them to update their W-4 if life events change. Make it easy for them to do so through Workful’s employee portal.
  • Regular Verification: Periodically e.g., annually ask employees to verify their personal and tax information on file.

4. Stay Up-to-Date on Payroll Compliance

  • Federal Laws: Keep an eye on changes to federal laws like the Fair Labor Standards Act FLSA, FMLA Family and Medical Leave Act, and IRS tax codes. For instance, minimum wage changes, new overtime regulations, or changes to tax brackets.
  • Familiarize Yourself with Workful’s Compliance Features: Understand how Workful handles specific state regulations e.g., California’s complex payroll rules, New York’s specific leave laws.

5. Leverage Workful’s Features to Their Fullest

  • Employee Self-Service: Encourage employees to use their Workful portal to view pay stubs, update personal info, and manage W-4s. This reduces administrative burden on your end.
  • Reporting: Don’t just run the basic payroll register. Explore the analytics and custom reports Workful offers. Use them to analyze labor costs, track PTO liabilities, and identify trends.
  • Integrations: If Workful integrates with your accounting software e.g., QuickBooks, ensure these integrations are properly set up and utilized to avoid manual data entry.

6. Maintain Excellent Record-Keeping

  • Digital Copies: While Workful stores much of your data, it’s a good practice to download and keep digital copies of essential payroll reports e.g., payroll registers, quarterly tax filings, annual W-2s in your own secure cloud storage or local drive.
  • IRS Requirements: The IRS requires you to keep payroll records for at least four years from the date the tax becomes due or is paid, whichever is later. This includes hours worked, wages paid, and all tax records.
  • Employee Files: Ensure all employee onboarding documents, W-4s, and direct deposit authorizations are securely stored and accessible.

By adopting these best practices, you can transform payroll from a dreaded chore into a smooth, efficient, and reliable operation, freeing up your time to focus on what truly drives your business forward.

Frequently Asked Questions

What is Workful?

Workful is a cloud-based payroll and HR software designed to help small and medium-sized businesses manage their payroll, time tracking, employee onboarding, benefits administration, and tax filings efficiently.

Is Workful suitable for small businesses?

Yes, Workful is specifically designed with small and medium-sized businesses in mind, offering features that simplify complex payroll and HR tasks for companies with varying numbers of employees.

How does Workful handle payroll taxes?

Workful automates the calculation, withholding, and remittance of federal, state, and local payroll taxes. Company payroll tax calculator

It also prepares and files necessary quarterly and annual tax forms like Form 941, W-2s, and 1099-NECs on your behalf.

Can employees clock in and out using Workful?

Yes, Workful typically includes an integrated time clock feature that allows employees to clock in and out via a web browser, mobile app, or designated time clock device. This data then flows directly into payroll.

How do I set up direct deposit for my employees in Workful?

Employees can typically enter their bank routing and account numbers directly into their Workful self-service portal, or you can input it for them.

Workful usually performs a “pre-note” transaction to verify the account before the first live deposit.

Does Workful manage paid time off PTO?

Yes, Workful allows you to set up and track various PTO accrual policies e.g., by pay period, annually and manage employee requests and balances for vacation, sick leave, and personal time. Workful ach deposit

Can Workful integrate with my accounting software?

Yes, Workful often integrates with popular accounting software like QuickBooks Online, Xero, and others, allowing for automated syncing of payroll data to your general ledger, which reduces manual data entry and improves accuracy.

What kind of reports can I get from Workful?

Workful provides various reports, including payroll registers, tax liability reports, wage and hour reports, deduction reports, and PTO accrual and usage reports.

These help with reconciliation, budgeting, and compliance.

How long does it take for direct deposits to process with Workful?

Typically, direct deposits processed through Workful take 2-4 business days to clear and appear in employees’ bank accounts from the time you submit payroll.

This processing time can be affected by banking holidays. Types of payroll software

Can I run payroll for both salaried and hourly employees in Workful?

Yes, Workful supports both salaried and hourly employees.

For hourly employees, you’ll input their hours, while for salaried employees, their fixed wage will be automatically applied unless adjustments are made.

What if I make an error on a payroll run in Workful?

Workful usually allows for voiding or adjusting payroll runs, especially if caught before the funds are debited or distributed.

If an error is discovered after funds have been dispersed, you might need to process an off-cycle payroll adjustment or a reversal, which Workful can assist with.

Does Workful handle new hire reporting?

Yes, many payroll systems, including Workful, automate the new hire reporting process to the appropriate state agencies, which is a federal requirement to help with child support enforcement. Workers comp workful

Is Workful secure?

Reputable payroll providers like Workful use robust security measures, including data encryption, secure servers, and multi-factor authentication, to protect sensitive financial and employee information.

Can employees access their pay stubs online?

Yes, Workful provides an employee self-service portal where employees can securely log in to view and download their pay stubs, W-2s, and update personal information.

Does Workful support multiple pay schedules?

Yes, if your business has different groups of employees paid on different schedules e.g., weekly for hourly, bi-weekly for salaried, Workful typically allows you to set up and manage multiple pay schedules.

What happens if I have an independent contractor 1099?

Workful can help you track payments to independent contractors and, at year-end, generate and file Form 1099-NEC for those paid $600 or more in nonemployee compensation.

How does Workful handle employee benefits deductions?

Workful allows you to set up various pre-tax and post-tax deductions for benefits like health insurance premiums, 401k contributions, FSAs, and HSAs, ensuring they are correctly withheld and reported. Payroll management india

Can Workful help with garnishments?

Yes, Workful typically has features to manage involuntary deductions like wage garnishments e.g., for child support or tax levies, ensuring the correct amounts are withheld and remitted according to legal orders.

What support options does Workful offer?

Workful generally offers customer support via phone, email, and sometimes live chat.

They may also have online help centers, FAQs, and tutorial videos to assist users.

How do I get started with Workful?

You typically begin by signing up for an account on their website, entering your company details, inviting employees, setting up pay schedules, and then running your first payroll after thorough review.

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