As the end of Q3 draws near, many Louisiana employers find themselves scrambling to ensure their payroll systems are in order. Between managing day-to-day operations, handling staffing needs, and navigating complex regulations, payroll often takes a backseat until it’s time for tax filings or an audit. Unfortunately, that can lead to costly mistakes, such as incorrect employee deductions, missed deadlines, or inaccurate tax filings.
The good news is that payroll clean-up doesn’t have to be overwhelming. By addressing a few key areas before the end of Q3, you can ensure your payroll system is running smoothly for the remainder of the year, helping avoid errors and making year-end processes a breeze. In this blog, walk through a simple payroll clean-up checklist that will keep your business compliant, save time, and reduce the risk of penalties.
Why Payroll Clean-Up Is Crucial Before Q3 Ends
Before diving into the checklist, it’s important to understand why payroll clean-up matters, particularly before the end of Q3.
Firstly, payroll errors can lead to more than just confusion, they can result in serious consequences for both your business and your employees. Mistakes in tax calculations or missed payments can lead to IRS penalties, audits, and legal complications. Additionally, employees’ trust in your payroll system can be impacted by recurring mistakes, which can ultimately affect employee morale and retention. For example, incorrect tax withholding can result in underpaid employees at year-end, which may lead to dissatisfied workers and possible disputes.
Moreover, payroll clean-up ensures your business is prepared for tax season. By ensuring that all withholdings are correct and that your payroll records are up-to-date, you can avoid the stressful scramble when it’s time to file your taxes. Getting ahead of payroll errors allows you to avoid delays with quarterly filings and year-end reports.
Payroll Clean-Up Checklist for Louisiana Employers
Here’s your payroll clean-up checklist to tackle before Q3 ends, ensuring your payroll system is accurate, compliant, and prepared for the year’s remaining quarters.
- Step 1: Review Employee Information
Start by reviewing all employee personal data. This includes verifying that W-4 forms are up-to-date, especially if employees have had changes in their tax filing status, number of dependents, or any other related information. Accurate tax withholding is essential to avoid under- or over-withholding, which could lead to compliance issues later. Additionally, ensure that all direct deposit details are correct and current, and verify that address and contact information are updated to prevent delivery issues with tax documents. - Step 2: Double-Check Overtime and PTO Records
In Louisiana, employers are required to adhere to state and federal overtime regulations. Now is the time to audit all overtime hours for non-exempt employees, ensuring they’ve been compensated at the correct rate. For Paid Time Off (PTO) or vacation days, check if employees have accumulated PTO balances and make sure any unused time is properly recorded. This will ensure your payroll is accurate, especially for employees who may be requesting time off in Q4. - Step 3: Audit Benefits Deductions
Another critical step in payroll clean-up is reviewing employee benefits deductions. This includes ensuring that the amounts being deducted for health insurance, retirement plans, and other voluntary benefits are correct. Check to make sure that employee contributions are being properly calculated and recorded, and ensure that your organization is in compliance with any changes to benefits regulations, such as updates to the Affordable Care Act (ACA). Any discrepancies in benefit deductions can affect both your employees’ pay and your organization’s tax filings. - Step 4: Confirm Wage and Salary Accuracy
One of the most important aspects of payroll clean-up is ensuring that all wage and salary information is accurate and up-to-date, particularly when verifying employee compensation to ensure pay rates and salary details align with the contracts or wage agreements for each employee. Employers should cross-check employee pay rates and confirm that any raises, bonuses, or overtime pay are accurately reflected in the system, especially for employees on hourly wages, exempt vs. non-exempt classifications, or those who may have transitioned from salaried positions to hourly pay. By reviewing and confirming wage and salary accuracy, employers can avoid underpaying or overpaying employees, both of which can lead to legal complications and employee dissatisfaction. Ensuring that all pay information is correct also helps employers comply with Louisiana’s minimum wage laws as well as federal wage laws. - Step 5: Review Payroll Tax Compliance
Payroll tax compliance is one of the most critical elements in payroll clean-up, as employers are responsible for correctly withholding federal, state, and local taxes from employees’ paychecks and ensuring these amounts are accurately reported and paid.
Key areas to focus on include:
- FICA: Ensure the correct Social Security and Medicare taxes have been withheld from employees’ wages and that both employer and employee portions are reported.
- SUTA (State Unemployment Tax Act): Verify that the correct Louisiana unemployment insurance taxes are being withheld and paid to the state. Louisiana’s unemployment tax rates can vary based on your business’s experience rating and should be regularly reviewed.
- FUTA (Federal Unemployment Tax Act): Confirm that the correct amount of FUTA has been withheld for federal unemployment contributions. Make sure these payments are made on time to avoid penalties
Proper tax compliance ensures your organization stays in good standing with the IRS, Louisiana Department of Revenue, and local tax authorities. By taking the time to double-check tax withholding and payments, you’ll avoid potential penalties, interest charges, and audits down the line.
- Step 6: Verify Payroll System Updates
Technology is a key ally in payroll management, but it’s essential to ensure that your payroll system is up-to-date with the latest legal changes and regulatory updates. As laws and regulations around payroll constantly evolve especially in areas like minimum wage or overtime pay, it’s important to stay ahead of these changes to avoid non-compliance issues. For instance, Louisiana minimum wage laws may be updated periodically, and payroll systems should automatically reflect these changes. Additionally, federal regulations, such as updates to the FLSA (Fair Labor Standards Act), also need to be tracked and implemented. By regularly updating payroll software and reviewing regulatory changes, you ensure that your payroll is always in alignment with the law. Automating this process also minimizes the risk of human error and ensures timely compliance with all applicable rules.
Stay compliant and streamline your payroll with Coeur Workforce Solutions.
Prepare Your Payroll for a Smooth Year-End
As the end of Q3 approaches, ensuring your payroll system is in good shape is critical for your business’s continued success. By reviewing wage and salary accuracy, confirming tax compliance, and ensuring your payroll software is updated with the latest regulatory changes, you can prevent errors, reduce administrative workload, and avoid costly penalties.
Schedule a consultation with Coeur Workforce Solutions today to optimize your payroll system, ensure compliance, and get your business ready for the rest of 2025. Let Coeur Workforce Solutions handle the complexity of payroll so you can focus on growing your business.
