Blog: Benefits

Paid family and medical leave programs are the fastest-growing category of state payroll obligation, and they are the single most commonly missed item when an employer opens a new state. The reason is timing: most of these programs did not exist a decade ago, so an experienced payroll professional's mental checklist for a new state — withholding registration, unemployment account, new hire reporting — predates them entirely.

Missing one is also expensive in a specific way. Because ...

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Benefits:
Year-End Bonus Taxation: Aggregate vs. Percentage Method6/22/2026

The year-end bonus run is the payroll cycle most likely to produce a genuine problem, because it combines an unusual amount, an unusual timing, and an employee population paying close attention to their net pay.

The withholding choice is the visible question. The consequences that actually cost money are the deposit threshold, the retroactive overtime, and — for 2026 — the earnings-code coding that determines whether your Form W-2 reports qualified overtime correctly.

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Benefits:
De Minimis Fringe Benefits: What Qualifies and What Doesn't6/14/2026

"De minimis" is the exclusion employers reach for when they want a benefit to be non-taxable and cannot identify another basis for it. It is also considerably narrower than the way it is used in practice, and it has one absolute rule that resolves most of the questions employers actually have: cash and cash equivalents never qualify.

That single rule disposes of gift cards, which are simultaneously the most common employee appreciation item and the most common fringe ...

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Benefits:
Employee Stock Purchase Plans: Payroll Tax Treatment6/13/2026

An employee stock purchase plan is unusual among equity compensation arrangements: for a qualified plan, the taxable event is generally deferred until the employee sells the shares, and even then there is typically no FICA and no withholding obligation for the employer. That combination is genuinely different from options and restricted stock units, and applying the RSU mental model to an ESPP produces the wrong answer in both ...

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Benefits:
Retirement Plan Contribution Limits 2026: 401(k), 403(b), and IRA6/12/2026

Contribution limits are the one part of retirement plan administration payroll cannot delegate. Every limit has to be loaded into the system before the first payroll of the year, monitored during it, and reconciled after — and several of the 2026 rules interact in ways that a single deduction-limit field cannot represent.

The 2026 Limits

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Benefits:
COBRA Administration: Payroll's Role in Benefits Continuation6/11/2026

COBRA is usually administered by HR or an outside vendor, which leads payroll to conclude it has no role. In fact payroll controls the input on which every COBRA deadline runs — the date and nature of the qualifying event — and a late or wrong termination record is the most common root cause of a missed COBRA notice.

Penalties for notice failures accrue per day, per qualified beneficiary, and can be joined by an excise tax and by liability for the ...

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Benefits:
401(k) Plan Administration: The Payroll Professional's Handbook6/7/2026

Payroll does not administer a 401(k) plan, but payroll determines whether the plan is compliant. Every deferral amount, every compensation figure fed to the recordkeeper, every deposit date, and every loan repayment originates in payroll — and a plan failure traced to a payroll error is corrected under the plan's rules, at the employer's expense, with the fiduciary exposure that comes with it.

This handbook covers what payroll actually owns.

The 2026

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Benefits:
Fringe Benefits Tax Guide: What's Taxable, What's Exempt6/6/2026

The default rule for fringe benefits is the one employers forget: anything of value provided to an employee is taxable compensation unless a specific statutory provision excludes it. Not "unless it seems like a perk." Not "unless it's small." Unless a Code section says otherwise.

That default explains why fringe benefit findings are so common in payroll examinations. Benefits get approved by HR or a manager, delivered by a vendor, expensed through accounts payable, ...

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Benefits:
Executive Compensation Taxation: Stock Options, RSUs, and Deferred Pay5/18/2026

Executive compensation is where payroll stops being a processing function and becomes a tax function. The instruments involved — non-qualified options, incentive stock options, restricted stock, restricted stock units, and non-qualified deferred compensation — each have their own taxable event, their own withholding treatment, and their own reporting obligation. Getting the timing wrong is not a rounding error; it can trigger penalty regimes that fall on the ...

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Benefits:
How to Handle Supplemental Wage Payments: Bonuses, Commissions, and Severance5/12/2026

Supplemental wages are where routine payroll produces non-routine mistakes. The withholding rules are genuinely simple — there are two methods and one mandatory override. The problems come from everything that happens around the payment: the overtime it retroactively changes, the deposit threshold it trips, the wage base it crosses, and the employee expectation it violates.

This guide covers the withholding mechanics first, then the four second-order effects that cause most ...

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