Small businesses may especially feel the strain of payroll taxes when hiring employees, as they need room to grow and maintain profitability. At the same time, they can’t compromise their employee body in many cases to reduce costs. In these instances, it’s important to find ways to minimize payroll taxes in 2024.
The following are some invaluable tips to help you reduce your 2024 payroll taxes.
1. Provide Employees With Compelling Alternatives to Raises if Possible
While employees may want and often deserve raises, you may be unable to give them comfortably. Still, you should reward your employees’ hard work when doable, in which cases you may be able to give them alternatives and still keep your employees grateful while encouraging them to progress.
For instance, you could offer benefits such as:
- Health insurance coverage
- Continued education solutions, such as training, certification, and skill development programs
- Retirement plan assistance
- Commute coverage
2. Reimburse Employees Through Accountable Plans
Many businesses may compensate employees for certain costs through their wages, but this could increase payroll taxes. To avoid this, you should instead provide reimbursement via an accountable plan that can factor into deductibles.
3. Hire Independent Contractors instead of Full-Time Employees
When appropriate, you could further reduce payroll taxes by hiring contractors to perform work instead of bringing on full-time staff. Independent contractors, including freelancers, are responsible for paying their taxes, including self-employment and income tax.
Hiring contractors is often a good strategy if you have certain menial or extraneous tasks that take up your full-time employees’ time, which could further increase these employees’ productivity as you work to minimize payroll tax.
4. Work With Payroll Experts
If you would like some help with payroll for your business, working with professional bookkeepers who provide employee payroll services could make a big difference. The right experts will be able to assist you in managing payroll and training for employees, along with other potential employer expenses, such as PTO, holiday pay, and various overhead costs.
The right experts will be able to track all of your expenses and work to minimize costs and taxes whenever possible while maintaining compliance with the IRS and other agencies.
Contact The Total Wealth Group for Help With Reducing Payroll Taxes in 2024 and Beyond
Need some expertise behind employee payroll tasks? Get the help you need while growing your business in the years ahead with a personalized plan from The Total Wealth Group. Our seasoned professionals can help you manage not only payroll but nearly every other aspect of employee expenses and other costs related to your business.
Contact us today to learn more about how we can help your business thrive while minimizing payroll tax. We’ll help you determine how to save money with effective financial planning while enabling your business to grow in the long term.