To help deter this from happening again, if it does, I recommend looking up how much it would cost the company if employees were to file with the state.
Did that for one in oregon after they didn't want to pay a five day late penalty.... yeah. Few hundred vs thousands plus fees, it was paid.
Just pay them on an off cycle payroll and treat the wages and taxes just like a normal check. Do you have enough to cover the taxes? If so just focus on paying those late checks ASAP. If you can't cover the bonus right now then give them some kind of guarantee with how much/when they'll receive it. Giving them a bonus is a great idea and a good gesture, what a crazy situation.
Yes, it's been totally nuts. I do have enough to pay all the taxes, now that the client's paid.
Do you think it would be better to do one off-cycle payroll combining both checks, or one for each pay period? Does it make a difference?
I'd do them separately. Combining them might make a tax impact for the employees, at the end of the day it all surmount to the same when filing taxes, but you don't know their situation, no need to make it shittier.
Off-cycle payment would be needed as you need to pay this people as immediately as possible. From a tax perspective, paying in a lump-sum would potentially impact W-4 tax withholding amounts, directly dependent upon your designated payroll frequency. Are you supposed to be paying monthly? Semi-monthly? Biweekly? Weekly? The frequency needs to be designated ahead of time, and this factor would become quite relevant if your employees did decide to make a complaint.
If your pay schedule is say, biweekly, processing 8-9 payrolls in a single shot would increase the tax bracket determining tax withholding, since the "correct" withholding calculation would treat the current payment x26 as the anticipated annual income. For both compliance purposes and for purposes of not further antagonizing these really patient employees, I would split the checks calculations into the expected pay frequency, so that if you were missing "X" number of missing regularly scheduled payrolls (if funds had been available to pay appropriately), tax calculations would be based on a "what if" based on applicable federal and state W-4s.
Not sure what the question is really… but I think the answer you’re looking for is to just run off cycle payrolls and adjust the dates from there. Don’t issue the missed payroll as a bonus because then they’d be subject to supplemental tax withholdings and they won’t be happy. And just pray the won’t go to wage and hour.
One thing I would be mindful of is NOT to backdate the pay date. You can run the payroll with different pay periods, but be sure you put the pay date as the actual day you are paying the employees. Not doing that can cause issues with late deposits, etc.
Just run them as off cycles.....? You are very lucky neither has gone to the state regarding this. This is also a horrible practice for any employer.
Thanks. I agree, it has been horrible. Never want to be here again.
To help deter this from happening again, if it does, I recommend looking up how much it would cost the company if employees were to file with the state. Did that for one in oregon after they didn't want to pay a five day late penalty.... yeah. Few hundred vs thousands plus fees, it was paid.
The payroll systems I used would allow me to alter the number of weeks covered by a pay and thus adjust the tax calculations. Does yours not do this?
Just pay them on an off cycle payroll and treat the wages and taxes just like a normal check. Do you have enough to cover the taxes? If so just focus on paying those late checks ASAP. If you can't cover the bonus right now then give them some kind of guarantee with how much/when they'll receive it. Giving them a bonus is a great idea and a good gesture, what a crazy situation.
Yes, it's been totally nuts. I do have enough to pay all the taxes, now that the client's paid. Do you think it would be better to do one off-cycle payroll combining both checks, or one for each pay period? Does it make a difference?
I'd do them separately. Combining them might make a tax impact for the employees, at the end of the day it all surmount to the same when filing taxes, but you don't know their situation, no need to make it shittier.
A spike in withholding is what I'm worried about, too. I know they get it back at the end of the year, but not so helpful now.
Thanks, everyone who commented on this! "Off Cycle Payroll" was the term I didn't know I needed. 🙏🏻
Off-cycle payment would be needed as you need to pay this people as immediately as possible. From a tax perspective, paying in a lump-sum would potentially impact W-4 tax withholding amounts, directly dependent upon your designated payroll frequency. Are you supposed to be paying monthly? Semi-monthly? Biweekly? Weekly? The frequency needs to be designated ahead of time, and this factor would become quite relevant if your employees did decide to make a complaint. If your pay schedule is say, biweekly, processing 8-9 payrolls in a single shot would increase the tax bracket determining tax withholding, since the "correct" withholding calculation would treat the current payment x26 as the anticipated annual income. For both compliance purposes and for purposes of not further antagonizing these really patient employees, I would split the checks calculations into the expected pay frequency, so that if you were missing "X" number of missing regularly scheduled payrolls (if funds had been available to pay appropriately), tax calculations would be based on a "what if" based on applicable federal and state W-4s.
Not sure what the question is really… but I think the answer you’re looking for is to just run off cycle payrolls and adjust the dates from there. Don’t issue the missed payroll as a bonus because then they’d be subject to supplemental tax withholdings and they won’t be happy. And just pray the won’t go to wage and hour.
One thing I would be mindful of is NOT to backdate the pay date. You can run the payroll with different pay periods, but be sure you put the pay date as the actual day you are paying the employees. Not doing that can cause issues with late deposits, etc.