Everything Employers Need to Know About Payroll in Kentucky
Employers must comply with several payroll regulations in Kentucky, including the Fair Labor Standards Act (FLSA) and the Kentucky Wage and Hour Law. These rules require employers to keep time records of employees’ working hours and pay them accordingly. The laws also cover pay raises, bonuses, commissions, deductions, overtime, and minimum wage rates among other things. This guide to payroll in Kentucky explains all employers need to know about these important regulations so they can run their business efficiently and successfully in this state.
An Introduction
Whether you’re a new business owner or an experienced employer, it’s important to know how to do payroll in Kentucky. This guide will provide everything you need to know, from setting up your account to filing taxes. Plus, we’ll answer some frequently asked questions along the way. Let’s get started!
Basic Principles
All employers in the state of Kentucky are required to withhold state and federal income taxes from their employee’s paychecks. In addition, employers must also withhold Social Security and Medicare taxes. The withholding rates for these two types of tax vary based on how much the employee earns each year.
Understanding KY Wage Payment Law
The law requires that all employers pay their employees at least twice per month on regularly scheduled paydays. The payments must be made in cash, check direct deposit, or payroll card.
Deductions from an employee’s wages are only allowed if they are for lawful purposes and are authorized by the employee in writing.
Employers must provide each employee with a written statement of earnings that includes gross and net pay, as well as any deductions made from their paycheck.
What Does it Mean?
Payroll is the process of calculating and distributing wages to employees. In Kentucky, employers are required to withhold state income tax from their employee’s paychecks. Withholding tax is how the state collects revenue to fund public services like education and roads.
The Main Types of KY Payroll Systems
There are a few different types of payroll systems that employers in Kentucky can use. It is important for employers to decide which system they will be using and make sure their employees know how it works. With so many different options, it is difficult for an employer not in the know to make this decision on their own. To help you out, we have created a short list of pros and cons for each type of KY payroll system
Practical Tips
- Decide which payroll system you will use. There are many software programs available, as well as online services that can handle payroll for you.
- Gather the required information from your employees. You will need their Social Security numbers, dates of birth, and addresses.
- Register with the Kentucky Department of Revenue. You will need to obtain a business license and pay any taxes that are due.
- Calculate your employees’ pay. Be sure to include overtime pay and holiday pay.
- Figure out how much money is needed for withholding taxes, unemployment insurance premiums, retirement contributions, and health care insurance premiums.
- Select how often you want to make these payments (weekly or monthly).
- File all the necessary paperwork with the appropriate state agencies (Department of Revenue). 8. Have your payroll manager input all this data into an automated payroll system so everything is calculated correctly each time someone is paid.
