September 5-9 is National Payroll Week, which recognizes the valuable contributions America's workers and payroll professionals make every day in our community. To celebrate, Nextep's team of Payroll Professionals offers these tips to help your employees stretch their paychecks.
- Use direct deposit. This will greatly reduce the number of lost, stolen, or delayed checks and the stop payment fees that accompany them.
- Take advantage of pre-tax benefits, including health benefits, college savings plans, and health and dependent care flexible spending accounts.
- Take advantage of the FICA reduction. During 2011, the employee portion of Social Security FICA is reduced from 6.2% of wages to 4.2%. Diverting that extra 2% into an IRA or 401(k) results in more money in your pocket for retirement.
- Maximize your 401(k). If your company offers matching funds for your retirement contributions, contribute as much as you can up to the match; otherwise, you are giving up "free" money.
- Withhold the correct amount of taxes. A tax withholding calculator is offered by the IRS on their website. Once the correct federal withholding is calculated, the employee may submit a revised IRS form W-4 to Nextep's Payroll Department at email@example.com, or fax to 888-811-5161.