All employers know that they must comply with the best payroll practices for construction payroll deductions in 2023. Understand the different deductions that the Internal Revenue Service may apply to your construction workers in order to achieve total compliance. Whether your company needs to factor in any prevailing wages or certified payroll reports, construction accounting and payroll differ from other more general company’s payroll tasks. Navigate payroll deductions from start to finish for tax year 2023 with specialized payroll software. Review mandatory deductions and voluntary deductions for your construction payroll before you invest in new software tools.
Advanced Micro Solutions’ program processes “live” or after-the-fact payroll for businesses that are located in all 50 states, plus the District of Columbia and Puerto Rico. Our AMS Payroll add-on module offers its users easy payer and employee setup. Download our free 1099-etc Demo software today to learn how to create up to 40 User Defined Fields for deductions or additions, such as 401Ks or health insurance.
What are Common Construction Payroll Deductions in 2023?
Examine all of the different types of possible construction deductions before you run payroll management tasks.
Social Security and Medicare Taxes – Calculate and withhold the correct amount of Social Security and Medicare taxes from all of your employees’ paychecks. The Federal Insurance Contributions Act (FICA) taxes are mandatory deductions. Keep in mind that the combined Social Security and Medicare tax rates may slightly fluctuate from one year to the next year.
Federal and State Taxes – Stay up-to-date regarding any federal and state tax law changes. Avoid penalties or legal consequences when you review the state’s tax rates and regulations. Employees pay federal and state taxes based on their incomes. An employer’s construction payroll deductions in 2023 must use an employee’s income and tax bracket to determine the accurate tax withholdings for each of their employees.
Retirement Contributions – Provide your employees with details regarding their retirement savings options. Outline the benefits of participating in these types of plans. Employees can make retirement contributions that qualify as voluntary deductions. Consider if you want to match your employees’ contributions.
Health Insurance Premiums – Work closely with insurance providers to improve the likelihood of accurate deductions and making timely payment of health insurance premiums. Provide your employees with comprehensive details about their health insurance options. Inform them of the co-pays, as well as coverage limitations and deductibles. Make construction payroll deductions in 2023 if an employee is enrolled in your company’s health insurance plan.
How to Calculate and Withhold Construction Deductions
Follow a step-by-step process when it is time for you to calculate and withhold deductions. Stay compliant and ensure the appropriate payment processing by:
Determining Tax Withholdings – Obtain an employee’s Form W-4 to determine their correct tax withholdings using their income and tax bracket. The form provides information about their filing status, allowances, and other withholding requests.
Calculating Union Dues – Find out the specific rate or the labor union’s set percentage to calculate the union dues. Reference that information when you calculate the deductions for each employee’s wages.
Calculating Health Insurance Premiums – Make construction payroll deductions in 2023 after you have determined the coverage, provided subsidies, and employee contribution percentage.
Conducting Retirement Contribution Calculations – Keep yourself aware of any legal tax rate changes or new deduction requirements. Review all of your employees’ retirement plans. The plans will offer information regarding how to accurately calculate any deductions.
Why Construction Companies Choose AMS
AMS Payroll is one of six optional add-on modules. Construction businesses can use our base W-2/1099 Forms Filer program and build out with any of our modules. Our five other modules are E-File, Forms Filer Plus, Affordable Care Act Filer, 1042-S Filer, and Software Generated Forms. AMS Payroll supports up to 1,999 Payers and up to 9,999 employees per payer. Use regularly updated state and federal tax tables as you need them. We provide users with more than 30 different check types and include a certified payroll report.
Streamline construction payroll deductions in 2023 with trustworthy and efficient software. Record your state and federal tax deposit information, as well as disbursements, with an easy-to-use, menu-driven system. Import your construction company’s data from Excel, QuickBooks, PeachTree, or Tab-Delimited Text files. You can also export your data to a Tab-Delimited Text file or QuickBooks General Journal. Utilize our View command tool to familiarize yourself with the latest state and federal tax liabilities at any time. Ensure that employee deductions do not create more work than necessary with our reliable features.