Understanding Payroll Deductions in 2018: What can and cannot be Deducted from an Employee's Wages

Duration: 60 Minutes
Understand what an employer needs to deduct and withhold from an employee's wages in 2018. After calculating gross wages for an employee is accomplished, much more difficult decisions have to be made. What must an employer deduct from an employee's wages? What can be deducted legally? What can never be deducted? These questions and more must be answered correctly before processing that paycheck. And if this is the employee's final check, the rules may change! Handling deductions is a complex task that payroll must get right every time for every payroll check. Failure to deduct the proper taxes could result in penalties on the employer from the IRS, but making an illegal deduction for a fringe benefit or for collecting an overpayment can get the employer a visit from the federal department of labor auditor, the state department of labor auditor or both! Sometimes the federal government will allow the deduction but the state won't. Of course everyone knows that payroll deducts for federal and state taxes. However, how much input does the employee have concerning these deductions?
Payroll Deductions in 2018
Instructor: Mark Schwartz
Product ID: 509015
Objectives of the Presentation
  • Taxes: Which are mandatory, which are a courtesy, and which ones the employee controls
  • Child support: The limits but not beyond
  • Tax levies: Federal and state
  • Creditor garnishments: How many can you honor and how often
  • Voluntary wage assignments for "payday loans": When are they required to be honored
  • Handling fringe benefits such as health insurance or group term life
  • Uniforms: When does the employer pay for it and when does the employee furnish it
  • Meals: When do they become part of the employee's wages
  • Lodging: When is it part of the employee's wages and when is it a perk
  • Shortages: The employee came up short so they have to cover that right?
  • Breakage: You broke it so you have to pay for it – Is it legal or not
  • Overpayments: The employee was overpaid so can you just take the money back
  • Advanced vacation pay: The employee knows the vacation hours were advanced so can you take them back when the employee quits
  • Loans to employees: What terms can be set while the employee is still active and what can be taken when the employee terminates
  • Employee purchases: Active employees and terminated employees
  • Anti-wage theft laws and the states
Why Should you Attend
Many employers require their employees to wear uniforms for work. Can the cost of the uniforms and their upkeep be deducted from an employee's wages? What about cash shortages or breakage? Can you deduct the cost of shortage or breakage from the employee's paycheck under the state or federal laws? Some employers offer meals and lodging as part of the employee's work contract. What can be deducted from the employee's paycheck for employer provided meals and lodging and can this be used as credit against the minimum wage paid? What if an employee is overpaid, can the employer simply deduct the overpayment from future payments or does the employee have to agree to the deduction in writing? Does the federal law differ from the state law in this area and, if it does, which one does the employer have to follow?

Many employers advance vacation for their employees to ensure that all employees are rested and working at peak efficiency. But what if the employee takes their vacation in advance and then leaves the company? Can an employer recoup advanced vacation hours from the employee's final check under federal or state laws?

You will get answers to all these questions and more by attending this session by expert speaker Vicki M. Lambert. Vicki will explain which taxes are mandatory, which are a courtesy and which ones the employee controls. If the IRS or the state wants payroll to collect for back taxes; you will learn how it should be processed. Vicki will answer the question of what payroll should do if a "payday loan" deduction is received as opposed to a creditor garnishment? You will learn which ones must be honored and why.

Fringe benefits are a normal part of payroll for most employees. Deducting for voluntary fringe benefits such as health insurance or group term life can usually be an easy task. But what about health insurance under a medical support order? Does that change how it is processed by payroll? Vicki will discuss processing voluntary and involuntary health insurance deductions.

Many employers give loans, advances on wages to employees or allow employees to purchase items from the employer. Vicki will discuss how these can be recouped or repaid if the employee stays or if the employee terminates.

Areas Covered
  • Charts and examples on how to calculate disposable income for child support
  • Examples on calculating take home pay for federal tax levies
  • Charts and examples of how to calculate a creditor garnishment
  • When meals and lodging can be applied as a credit towards minimum wage
  • The facts concerning recouping overpayments under the FLSA
  • Update on anti-wage theft laws in the country
Who will Benefit
  • HR senior management
  • Benefits manager
  • Attorneys
  • Accountants
  • Third party administrators
  • Insurance agents and brokers
  • Employers
$300
Recorded Session for one participant
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Instructor Profile:
Mark Schwartz is an employment tax specialist and has over 15 years of employment tax experience as an independent consultant and as a payroll tax auditor with the State of California. He has managed an audit caseload of 20 ongoing audits, from small home-based businesses to large multi-national corporations. He is expert at defining regulatory and statutory requirements from local, State and Federal government agencies; and helping the average businessperson understand what that mean to their business. He has processed weekly and bi-weekly payroll checks plus tax forms for businesses with hourly as well as exempt workers, multistate operations and a wide variety of benefits.

Mr. Schwartz provides consulting services encompassing payroll processing and payroll tax issues. These include payroll tax minimization, payroll tax compliance reviews, independent contractor studies, use of electronic transfers, deductions, benefits, etc. Markhas represented both clients and the State in front of the State Appeals Board. He understands the complexities of local wage laws, unemployment and disability claims, and other wage and benefit issues affecting your employees.

Mark prides himself on his outstanding customer service skills. He listens attentively to his clientele, helping them bridge the gap between the small business world and Government bureaucracy. He eagerly assists with clients needs, and feels that educating clients toward faster, accurate and more complete payroll processes provides the most value.

Mark is a participating member of the American Payroll Association. He earned his BA and MBA in Finance at Santa Clara University. He has held Certified Internal Auditor and Certified Investment and Derivatives Auditor Credentials. Mark is currently pursuing a Certified Payroll Fundamentals Credential with the American Payroll Association.
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