Table of Contents

1. What are the tax benefits of a 401K or Section 125 deduction?
2. Where do I send child support?
3. When I close or sell my business how long do I have to provide W-2's to my employees?
4. Can an employee be exempt from taxes?
5. Do I have to pay my employees overtime?
6. Does Paytime report new hires to the appropriate state?
7. What paperwork/information is an employer required to have on file for new employees?
8. Why is it important to have hire and termination dates on file for each employee?
9. Can I charge an employee for processing wage attachment checks?
10. Am I required to pay holiday pay for federal or state holidays?
11. If a terminated employee requests a W-2 earlier than January 31?

Contributions to 401K plans are exempt from federal and state income tax, although some states still do not honor 401K.  Monies deducted for Section 125 plans are exempt from FICA tax, federal and state income taxes (except New Jersey).. 

Back to Top



Where do I send child support?

Federal law has now required all states to set up a central collection agency with in the state for child support payments.  Each state has, or will have shortly, a collection unit established.  Ask your state for details.

Back to Top



When I close or sell my business how long do I have to provide W-2's to my employees?

W-2's should be mailed out as soon as possible.

Back to Top



Can an employee be exempt from taxes?

All working citizens of the U.S. must pay FICA taxes.  Federal and state taxes may be blocked if earnings for the year do not exceed $700, and no one claims the employee as their dependent on a tax return.  If an employee does claim exempt from federal and state taxes be sure to keep a copy of the W-4.  A copy sent to the IRS may be appropriate in some instances.

Back to Top



Do I have to pay my employees overtime?

State laws for overtime vary, but Federal law, which overrides state law, requires that overtime be paid to any employee who works more than 40 hours during a one week period or more than 8 hours in one day.  Although, Paytime will not force you to pay overtime to your employees, we will strongly recommend it.

Back to Top



Does Paytime report new hires to the appropriate state?

With each pay, when there is a new employee, Paytime will provide a report that can be faxed to the appropriate state.  If this is inconvenient, Paytime can electronically file the new hire data for your company. A nominal fee will be charged..

Back to Top



What paperwork/information is an employer required to have on file for new employees?

Name, complete address, social security number, marital status and exemptions, Federal form I-9, with copies of approved I.D. (see I-9), Federal W-4 form for income tax deductions.

Back to Top



Why is it important to have hire and termination dates on file for each employee?

These dates should always be recorded as part of the employee's information on file. Also, if the employee files for unemployment benefits, you will be required to complete information required by the state which will allow a determination of unemployment benefits.  You may also need those dates for any employee with child support or court ordered garnishments.

Back to Top



Can I charge an employee for processing wage attachment checks?

Yes, but no more than $2.00 per garnishment, except for certain bankruptcy garnishments.  Refer to the court order.

Back to Top



Am I required to pay holiday pay for federal or state holidays?

No, unless it is part of your employment agreement.  Like vacation, sick, and personal time, it is an employee benefit.

Back to Top



If a terminated employee requests a W-2 earlier than January 31?

If there isn't any reason to believe that employment will resume, the employer must provide the employee with the Form W-2 the later of 30 days after the employee made the request or 30 days after the last payment of wages.  
IRS Reg. 31.6051-1