Do I need to cancel my payroll if I don’t have employees to pay?
You’ve worked hard to find and keep your drivers but they quit anyway. That sucks! We know it may not be the first thing that comes to your mind, but at some point, you may wonder what happens with your payroll. Do you need to cancel your payroll?
Before you ask that question you need to know if you are calling it quits or if you are going to hire another driver. Your answer will help us determine your next steps.
Hiring a new driver
You are starting the search for a new driver! That’s great! It can take some time to find the right fit. What happens to payroll in the meantime? Well, you still need to file tax returns. Even with no wage, the State and Federal governments (and maybe local) will still be looking for your returns. They don’t know what’s going on with your company and your employment struggles. They will start to assess your taxes if you don’t keep filing payroll tax returns. You have enough problems finding drivers, so let’s not add IRS issues too! Make sure you, or your payroll company, files a zero wage return for the tax period you have no wage to report.
When this happens with our clients, we charge a $15 per week fee as a “missed payroll fee”. We use these funds to offset our time to keep your tax filings current. This allows us not to bill you for a quarter-end fee or tax filing fee like other payroll services do.
Sure, it stinks for you to pay for payroll services with no employees. But, It’s better than receiving a tax letter that needs to be dealt with and possibility penalties and interest.
Not looking to hire a replacement?
If you are not looking to hire a replacement and no longer need a payroll service then you may want to discontinue your payroll taxes. This stops the State & IRS from looking for those returns from you. Should you change your mind and want to start things back up later, they can always be reinstated.
When this happens with our clients; there is a discontinuance (or reinstatement) fee that will be charged.
We would not recommend discontinuing if you are still planning on hiring drivers in the near future.
If you need help recruiting or retaining drivers, check out these helpful links!
Written by Mike Ritzema
With over 20 years of experience in entrepreneurship, management, business planning, financial analysis, software engineering, operations, and decision analysis, Mike has the breadth and depth of experience needed to quickly understand entrepreneurs’ businesses and craft the most suitable solutions.
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