When the year comes to a close, it’s the time for assessment for employers, and a time for rewards for employees. Companies will be preoccupied, busy in concluding the matters of the year and looking ahead of the company’s trajectory. If you’re an employer needing reminding of things to do to wrap up 2017, here are namely a few things you might want to do:
Upgrade your employee compensation for next year
As you busy yourself in preparation for next year’s financial details, you might want to stop and think of raising pay rates for your staff, or at least, to those who you think deserves. This will show just how you treasure and appreciate their service to the company. The amount you’ll raise to should, of course, be limited to what you can afford. Factor in the cost of compensation and payroll taxes as well. These are important factors as these affect the actual sum of next year’s employee compensations.
Consider changes to happen for the incoming year
The wage base for the Social Security portion of FICA will be $128,700 in 2018 This will result in employers such as yourself paying more FICA taxes in the incoming year. The 6.2 percent share is applied to this higher wage base. If you employ and pay workers by the hour, see if there is a minimum wage rate increase for next year.
These increases should take effect in Hawaii, Maine, Oregon, and in other states and cities. California, Florida, Ohio adjust their rates in accordance with the cost of living in their area.
Year-end bonuses and things to take note of
Annual bonuses are a common practice among good companies that make it a priority to appreciate and treasure their employees. And if you’re one of them, you should remember that bonuses are tax-deductible. If your business is a cash basis business in terms of compensation, remember to deduct bonuses in the very year they are paid. If your compensation is, bonuses that accumulate before the end of the year are deductible within the year if paid within two and half months after the end of the year.
Factors like manner of tax deduction (S or C companies) should be taken into consideration as well. Bonuses for S corporation shareholder-employees are only deductible when paid. For owner-employees in a C corporation, the manner is the same in the case of a personal service corporation or for majority (more than 50%) owners.
Remind your employees about their available benefits
Depending on your company’s policy, some benefits may expire by the end of the year. Take some time to remind your employees of the benefits they are still able to avail within the year. For personal leave, vacations and sick days, matters depend on company policy such as if they can be carried over to the coming year or not.
Flexible spending accounts or FSAs have a use-it-or-lose-it feature, so remind your employers (if they have this benefit) that this is still up for availing. There is an exception to this, however, as standing plans allow employees to submit claims within a set time-like 30 days after the close of the year-for expenses from the previous year.