Frequently Asked Questions

Can I pay some employees as independent contractors to save taxes?

If you are using the word employee, no. This is always a hot topic with the IRS. Generally, individuals you hire are treated as employees subject to income tax withholding and unemployment taxes. There are cases where individuals are legitimately classified as independent contractors, responsible for their own taxes, insurance and tools. We can provide a list of questions that will help you make the determination. Since our role is to keep our clients in compliance we always recommend consulting a CPA or an attorney if you still are unsure about a classification.

When is the latest time payroll can be submitted for same-day processing?

To operate efficiently, we schedule our day around the work to be completed. If you require an additional payroll, we generally request information by 2:00 p.m. However, we can make arrangements for later processing, if necessary.

How is payroll submitted to SBS?

We do everything we can to be flexible and to accommodate individual client schedules. That said, the preferred method of submission is an email with an Excel file. Excel is easy to read and includes totals for us to review. If you would like more control over your data or have additional reporting needs, payroll hours can be entered using our PC based remote software or our on-line product. Employee changes and hours are then uploaded into our software for processing. Another option offered is our timekeeping product. Employee time is tracked and reviewed online. Once approved by management we then import the data and process payroll.

When can we switch payroll providers?

Switching your payroll to SBS can be done at any time, and we'll do everything we can to make the transition a smooth one. However, the best time to switch is at the beginning of a calendar quarter, because we enter year-to-date payroll data and reconcile to each tax form that has been filed.

If you switch during the year, we will complete all year-end filing and will assist you in notifying your previous payroll provider as to filing requirements.

When and how should the current payroll provider be notified of a switch?

We will assist you in notifying the previous payroll provider and suggest waiting until the quarter is complete to assure that there is an understanding of tax filing requirements. The previous payroll provider will prepare and file the quarterly tax forms based on their payroll preparation and tax administration. We officially take over your business with the first payroll we prepare.

What forms do you need? Blank tax forms, for example?

There are several items that we like to see. Every December it is important that we receive a copy of the state unemployment rate determination. Since this is the only tax rate that changes annually and is calculated based on a clients' experience, we review the rate calculation for accuracy. Having this form early helps insure filing accuracy throughout the year.

Secondly, we like to see quarterly unemployment forms, since these confirm the unemployment rate and may include a credit or balance due-usually for pennies due to rounding. A larger amount, however, may indicate a filing problem from a previous quarter.

Lastly, each year the IRS determines the tax deposit filing frequency. Monthly tax filers are required to file more often once their taxes reach a certain level. We review our client list each year and will make the change when required. However, for new clients, we may not yet have all of the information required.

Is it beneficial for companies to have their taxes swept?

Failing to withhold tax dollars from an employee's payroll can cause a company trouble down the line. That's why many businesses opt to move all the dollars required to cover the tax liabilities into a trust account, which is referred to as "sweeping" taxes. This transfer is completed, along with employee direct deposits and payroll fees. There are several benefits to this method of filing taxes:

1. There will only be one general ledger entry to record and reconcile covering direct deposit, taxes and fees. This will save time and help maintain a more accurate bank balance. Without sweeping, you would have to post each tax payment separately and could possibly miss a posting.
2. This method helps in budgeting and eases cash flow. With some taxes paid monthly and some quarterly, you may be surprised by a large amount due! Our clients like the fact that tax liabilities are covered with each payroll.
3. Our clients like the fact that we assume responsibility. It's very easy to overlook signing forms or mailing payments-costly and time-consuming mistakes when submitting payments late. When we do it, you don't have to think about it at all.
4. Sweeping taxes is far more efficient for us. We work hard to keep our costs down, which in turn allows us to keep our fees competitive.

Does SBS complete 1099 forms?

Yes. This service is priced the same as our annual W-2 filings. Some clients have us pay their 1099 vendors through our payroll system, so that we already have the correct information. We ask only that the information be provided to us as early as possible.

If hours are missed on an employee, how do they get paid?

When hours are missed, there are two options available to resolve the problem: We can run an additional payroll, (additional payroll fees will incur), and if the employee requests direct deposit, the funds can be in his or her account the next day. Or we can calculate the additional net payroll, and you would issue a manual check to the employee. The manual check and taxes would then be processed with the next payroll run.

If, on the other hand, an employee is overpaid, we suggest voiding the original check and issuing a new payroll. (Payroll fees would apply.) Or, if possible, the employee's pay could be reduced by the appropriate amount the following payroll period.

What about time clocks?

Time Clocks have been a great addition to our Payroll offerings Get rid of the other intro sentence We've offered timekeeping products for the last couple of years. Our system tracks employee time, and once approved by management, it is imported directly into our software. This system, along with direct import, saves time and eliminates human error when calculating timecards. Setup is a breeze-with 15 minutes of training, you'll be ready to go.

Cost reporting has never been more important to our client companies. Our system allows the employer to track labor costs by department or product with easy-to-read reports. There's no software to install, and data editing and reporting is conveniently performed via the Internet. Employees can key a code or swipe a card in less time than it takes to line up punches on a timecard; office employees can punch in and out on their computers.

Can copies of my reports be sent to my accountant?

Yes, we will send copies of reports to your accountant for a small shipping fee. This was part of the reason we developed our Internet-based payroll system, which allows an individual, with a login and password, to view payroll reports, employee information and employee payroll stubs online. Accountants can be given a password to review reports anytime and print those that they need. When used with direct deposit, this can make payroll a paperless function.

If our server is down, what about sending our payroll to you for input and processing?

Be assured that we will always do what it takes to get your payroll done correctly and on time. Whether there are computer issues, vacations, emergencies or even weather- related issues, we will input your payroll from a fax sheet or telephone call. We assure you complete confidentiality throughout the process.