<\/p>\n
I make light of this, but I get it. \u00a0How do you know what your payroll is going to be for the next 12 months? \u00a0It could be $100,000, but if you get the Initech contract, it could be $200,000. \u00a0If your new line of s\u2019more takes off like you think it will, it could be $300,000. \u00a0If BarDonHill\u00a0O\u2019ClinTrump gets elected, your payroll may be $0 and you\u2019ll most likely move to Canada.<\/p>\n
Some industries don\u2019t have to worry about this. \u00a0Take the insurance industry. \u00a0Our payroll stays about the same, growth comes very steadily, and if we do amass more payroll than expected, our rates are low enough to not have to stay up at night thinking about the additional costs.<\/p>\n
But other higher risk industries whose workers comp incurs a significant cost are not like us insurance geeks hanging out in our little cubicles.<\/p>\n
Construction is one that may vary greatly in payroll. \u00a0Payroll fluctuates not just year to year, but from month to month. \u00a0As one project ends, a new project starts. \u00a0In between projects, there may be little to no payroll.<\/p>\n
Farming is another example. \u00a0They have fluctuating payroll because their work depends on the season. \u00a0One month they\u2019re picking and crushing\u00a0grapes, and the next month, there\u2019s nothing going on except sampling the various pinot noir varieties. \u00a0I know, I know, there\u2019s never really \u201cnothing going on\u201d at a farm, but the point is that payroll can fluctuate.<\/p>\n
Sometimes it\u2019s not the nature of the industry itself, but the stage of life the business is in. \u00a0If it\u2019s a startup, who knows what the payroll will actually be? \u00a0Will the market respond like they think it will? \u00a0If so, what are the payroll ramifications?<\/p>\n
The reason for the anxiety that befalls when one has to estimate next year\u2019s payroll is not just because the future is unknown; it\u2019s because the business owner will have to pay a potentially expensive workers comp policy based on that estimate! \u00a0If he overestimates payroll, he\u2019ll be starving his business of much needed cash and have to wait months after his policy expires and the final audit is completed before his insurance company\u00a0refunds his overpayment. \u00a0If he underestimates payroll, he\u2019ll pay a nice low monthly premium throughout the year, but will have to write\u00a0a big check once the final audit is completed.<\/p>\n
My friends, there is a solution to this madness. \u00a0It\u2019s called monthly reporting. \u00a0Or Pay As You Go. \u00a0Or Pay As You Owe. \u00a0Or some other snazzy name. \u00a0Regardless of what the insurance company calls it, the concept is the same. \u00a0You pay each month based on your actual paid payroll.<\/strong><\/p>\n How does it work? \u00a0There are basically two ways:<\/p>\n The first one is through monthly self reporting. \u00a0This is where the insurance company sends you a bill each month with a table on it. \u00a0You write down your actual paid payroll in each of the appropriate classes and multiply it by the rates the insurance company has provided, write the check, and send it in. \u00a0The online version of this is usually available as well.<\/p>\n The second\u00a0way to do it is by integrating it into your payroll service. \u00a0Your payroll service essentially does the payroll reporting for you. \u00a0You report your payroll to the payroll service, and they fill out the form and send the check to your workers comp carrier. \u00a0This used to be a somewhat exclusive service that was only available through the two big national payroll services (Paychex and ADP), and only if you got\u00a0your insurance through their wholly owned insurance brokerages. \u00a0But now, availability is much more widespread. \u00a0How is this all made possible? \u00a0Through the use of companies like\u00a0RPM<\/a>, that coordinate between your payroll service and the insurance company.<\/p>\n So what\u2019s stopping you? \u00a0Well, for one, your insurance company has to make it available for it to happen. \u00a0And regarding\u00a0the second variation; both your insurance company and your payroll service have to be on board. \u00a0If you\u2019re with State Fund \u2013 sorry, you\u2019re stuck with their fixed billing plan based on your payroll estimates. \u00a0But otherwise, this service is becoming widely available.<\/p>\n If you can, take advantage of this, business owners, and take a load off! \u00a0Use your prognostication skills for other things like lotteries or Super Bowl scores!<\/p>\n \n","protected":false},"excerpt":{"rendered":" What is your payroll going to be for the […]<\/p>\n","protected":false},"author":3,"featured_media":3458,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,7,13],"tags":[],"class_list":["post-3487","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-insurance","category-liability-insurance","category-workers-compensation"],"_links":{"self":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/3487","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/comments?post=3487"}],"version-history":[{"count":1,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/3487\/revisions"}],"predecessor-version":[{"id":44640,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/3487\/revisions\/44640"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/media\/3458"}],"wp:attachment":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/media?parent=3487"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/categories?post=3487"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/tags?post=3487"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}