--- title: [Payroll Compliance Checklist] What You Need to Know As a Small Business description: Payroll compliance is about meeting your payroll obligations as required by law. Read more to learn how your organization can stay compliant. image: https://blog.ahola.com/hubfs/pexels-tima-miroshnichenko-6694861.jpg --- Start typing and press Enter to search * * # [Payroll Compliance Checklist] What You Need to Know As a Small Business [Home](https://www.ahola.com/) » [News & Events](https://blog.ahola.com/payroll-compliance-checklist-what-you-need-to-know-as-a-small-business) » [Payroll Compliance Checklist] What You Need to Know As a Small Business [2022-05-24%2020:19:36](2022-05-24%2020:19:36) ![](https://blog.ahola.com/hubfs/pexels-tima-miroshnichenko-6694861.jpg) ## [Payroll Compliance Checklist] What You Need to Know As a Small Business By [ Ahola Corporation ](https://blog.ahola.com/author/ahola-corporation)  Posted [ May 24, 2022](2022-05-24%2020:19:36)  In  [Payroll](https://blog.ahola.com/tag/payroll), [Benefits](https://blog.ahola.com/tag/benefits), [Human Resources](https://blog.ahola.com/tag/human-resources), [Recruiting](https://blog.ahola.com/tag/recruiting), [Tax Compliance](https://blog.ahola.com/tag/tax-compliance), [Trending Topic](https://blog.ahola.com/tag/trending-topic), [Employees](https://blog.ahola.com/tag/employees), [Hiring](https://blog.ahola.com/tag/hiring), [Time & Attendance](https://blog.ahola.com/tag/time-attendance) - - - - - Payroll compliance is about meeting your payroll obligations as required by law. Read more to learn how your organization can stay compliant. ### **1. Federal wage and hour laws** The [Fair Labor Standards Act (FLSA)](https://info.ahola.com/ahola-payroll-hr-solutions-download-wage-hour-compliance-guide) sets federal wage and hour standards, which are administered by the U.S. Department of Labor. These standards cover: - Federal minimum wage. - Overtime pay and exemptions. - Work hours, including meals and rest breaks. - Child labor, including permissible occupations and work hours. - Recordkeeping for nonexempt and exempt employees, including timekeeping and payroll records. The FLSA also limits the deductions that can be made from nonexempt and exempt employees' pay. ### **2. State wage and hour laws** These regulations are established individually by states. [Some states have only a few wage and hour laws](https://info.ahola.com/download-your-free-2022-state-and-local-minimum-wage-guide), choosing largely to follow the FLSA. Other states, such as California and New York, have extensive wage and hour laws — many of which are more generous to employees than those of the FLSA are. Also, many states have wage and hour laws that are not addressed under the FLSA (e.g., final paychecks, pay stubs, frequency of pay and direct deposit).  Some cities and counties have local wage and hour ordinances, such as local minimum wage. ### **3. Wage garnishments** Title III of the Consumer Credit Protection Act (CCPA) regulates[ federal wage garnishment](https://blog.ahola.com/understanding-garnishments) limits for consumer debts, child support and alimony. Some states have lower garnishment thresholds than the CCPA does. Separate laws apply to garnishments for federal student loans and Internal Revenue Service (IRS) wage levies. ### **4. Employee benefits** Payroll is responsible for deducting benefits contributions from employees' wages and administering benefits payments. Therefore, employers must know [which payroll laws apply](https://blog.ahola.com/understanding-taxable-vs.-nontaxable-benefits) to the benefits they provide. For example, pretax benefits, post-tax benefits and mandatory paid time off all have different rules.    ### **5. Federal employment taxes** The IRS oversees federal employment tax laws, which require employers to [withhold federal income tax](https://blog.ahola.com/4-things-you-need-to-know-about-payroll-tax), Social Security tax and Medicare tax from employees' wages. Employers must also pay their own share of Social Security and Medicare taxes plus federal unemployment tax. ### **6. State and local employment taxes** Most employers must withhold state income tax from employees' wages. (Nine states do not require state income tax withholding.) Depending on your location, you may need to withhold other state taxes from your employees' wages. For example, employers in California must withhold state disability insurance tax, and employers in New Jersey must withhold state unemployment tax. Moreover, some cities and counties require local income tax withholding.    On the employer side, most employers must pay state unemployment tax plus any other taxes levied by the state. Further, a few local governments impose local taxes on employers.  Note that some states have reciprocal tax agreements for employees who live in one state but work in another. ### **7. Payroll reporting** Employers must file periodic reports with the appropriate federal, state and local agencies. This includes:  - [**Form W-2 reporting.**](https://blog.ahola.com/understanding-form-w-2) - Federal employment tax reporting. - State wage and tax reporting. - Local wage and tax reporting, if applicable. As you work toward payroll compliance, consider other relevant aspects not covered in this article, such as state laws for unclaimed paychecks and the use of payroll cards.   Looking for a payroll provider to assist your business with payroll processing and tax filing? [Learn more about Ahola.](https://ahola.com/payroll-services/) ### Reply a Comment ## RELATED POSTS [![](https://blog.ahola.com/hubfs/blog%20stock%20frame%20(25).png) ](https://blog.ahola.com/year-end-payroll-checklist-for-employers) [Year-End Payroll Checklist for Employers](https://blog.ahola.com/year-end-payroll-checklist-for-employers) [![](https://blog.ahola.com/hubfs/Imported_Blog_Media/qtq80-j7CtwQ.jpeg) ](https://blog.ahola.com/payroll-tax-regulations-for-small-businesses) [Payroll & Tax Regulations for Small Businesses](https://blog.ahola.com/payroll-tax-regulations-for-small-businesses) [![](https://blog.ahola.com/hubfs/canstockphoto21083441.jpg) ](https://blog.ahola.com/payroll-hr-year-end-checklist) [Payroll & HR Year-End Checklist](https://blog.ahola.com/payroll-hr-year-end-checklist) ## SUBSCRIBE ### Recent posts - [Professionalizing HR Without Losing Your Family Culture ](https://blog.ahola.com/professionalizing-hr-without-losing-your-family-culture) - [Why Encouraging Employees to Take Summer Vacation Benefits Your Workplace ](https://blog.ahola.com/why-encouraging-employees-to-take-summer-vacation-benefits-your-workplace) - [Ahola Named a 2026 Top Workplace — Six Years Running! ](https://blog.ahola.com/ahola-named-a-2026-top-workplace) - ### Topics - [Affordable Care Act (13)](https://blog.ahola.com/tag/affordable-care-act) - [Benefits (223)](https://blog.ahola.com/tag/benefits) - [Cybersecurity (1)](https://blog.ahola.com/tag/cybersecurity) - [Employee Engagement (255)](https://blog.ahola.com/tag/employee-engagement) - [Employees (603)](https://blog.ahola.com/tag/employees) - [Family Business Insights (10)](https://blog.ahola.com/tag/family-business-insights) - [Hiring (282)](https://blog.ahola.com/tag/hiring) - [Human Resources (645)](https://blog.ahola.com/tag/human-resources) - [Laws/Policies (26)](https://blog.ahola.com/tag/laws-policies) - [Managing COVID-19 (153)](https://blog.ahola.com/tag/managing-covid-19) - [News Release (56)](https://blog.ahola.com/tag/news-release) - [Offboarding (3)](https://blog.ahola.com/tag/offboarding) - [onboarding (7)](https://blog.ahola.com/tag/onboarding) - [Payroll (428)](https://blog.ahola.com/tag/payroll) - [Recruiting (142)](https://blog.ahola.com/tag/recruiting) - [Safety (121)](https://blog.ahola.com/tag/safety) - [Tax Compliance (230)](https://blog.ahola.com/tag/tax-compliance) - [Time & Attendance (124)](https://blog.ahola.com/tag/time-attendance) - [Training & Development (214)](https://blog.ahola.com/tag/training-development) - [Trending Topic (75)](https://blog.ahola.com/tag/trending-topic) - [Uncategorized (1)](https://blog.ahola.com/tag/uncategorized) - [Webinars (69)](https://blog.ahola.com/tag/webinars) - [Workers Comp (1)](https://blog.ahola.com/tag/workers-comp) [see all topics](https://blog.ahola.com/payroll-compliance-checklist-what-you-need-to-know-as-a-small-business#) ### GENERAL DISCLAIMER This blog is for informational and educational purposes only. It does not constitute legal advice, and cannot constitute legal advice, because the authors are not licensed attorneys. Readers should not rely or act upon any information presented on this blog without seeking professional legal counsel. The views expressed in each post are those of the author, and the author alone; they are not the views of Ahola. The information provided in this blog is general, and based on information available as of the date of publishing. Information herein is provided on an “as is” or “as available” basis; we make no warranty of any kind to you regarding the information provided and disclaim any liability for damages from use of the blog or its content. Please consult an attorney to obtain advice with respect to any particular question or issue. [![](https://blog.ahola.com/hubfs/pexels-fox-1595385.jpg) What Does Gen Z Want From an Employer? 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