Whether you own a single food truck with one employee or a growing food truck empire with dozens, mistakes are bound to happen. Unfortunately, these payroll mistakes can end up costing vendors a lot of money.
Recent legislation and regulatory changes make it more important than ever to keep payroll top of mind. Although payroll is complex, it doesn’t have to be a consistent source of stress. Take these steps to stay on top of your food truck payroll program to avoid common payroll mistakes.
5 Ways To Avoid Costly Food Truck Payroll Mistakes
- Keep track of important payroll deadlines. Timeliness is vital for employee relations, as well as deadlines for depositing payroll taxes to federal, state and local agencies. Late tax deposits can result in penalties and interest charges.
- Classify employees appropriately. Classify your food truck employees into categories such as full time, part time, temporary employees and consultants to make sure your payroll reporting is accurate. That will help you avoid common pitfalls if your food truck undergoes an audit.
- Report and calculate overtime pay. An incorrect classification could be costly if your food truck is audited. According to the Department of Labor, litigation is increasing over “non-exempt” employees treated as “exempt” who didn’t receive overtime pay. Make sure to take time to review all of your employees exempt and non-exempt status.
- Double check data entries. An incorrectly entered hourly wage and the wrong number of employee hours per pay period can cost you a lot of money. To avoid these mistakes, ask your payroll service if a double check is part of its process. If it’s not, ask to add it or find another payroll service.
- Save your payroll records. Your food truck must maintain a comprehensive record for every one of your employees. This includes time sheets, cancelled checks and W-4 forms. Keep them in a safe and accessible location for five years. Failure to do this could lead to criminal penalties.
Please note: When we researched for this article we found that the Department of Labor must be able to inspect your records within 72 hours of notifying you, so keep your payroll records easily accessible.
The Bottom Line
Ask ten food truck owners what the worst part of running a food truck is for them, and chances are that many of them will say, “payroll.” Payroll is a complex and ever-changing function where mistakes are easy to make and difficult to resolve. By being aware of common mistakes, you can pay your employees and your taxes while also avoiding costly penalties.