Part-time employees always raise the payroll clerks eyebrows. Almost like determining which season of the year is it; spring, summer, fall or winter. Well it shouldn’t be. These tips should help you with the determining part-time verses full-time leaving no guess work for your payroll clerk. 

1. Withhold FICA on part-timers (and retirees). Even if someone who works for you part-time also has a full-time job where they have had 100% of their FICA withheld for the year, you must withhold the full amount of FICA from their pay. These individuals can obtain a refund of any overpaid FICA on their 1040. Similarly, if a retiree receiving Social Security benefits works for you, say, 1 day a week, you must withhold FICA.
2. Former employees who come back to work for you are most likely employees—not independent contractors. If they do the same job they did before they left, especially in the same tax year, they are employees.
3. Length of employment does not determine worker status. Even employees who work for only part of 1 day are still employees, and all employment taxes apply.
4. Giving part-timers benefits is optional. Generally, you do not have to pay part-time or summer help for holidays, and need not include temps and part-timers in health, pension and other benefits. But to exclude them, have a written plan stating which benefits are not available to these workers.
5. Defining “part-time” v. “full-time” employees. Federal wage-and-hour law restricts only the number of hours worked in the workweek, when overtime must be paid (for each hour worked over 40 hours in the workweek), and the number of hours that children can work. Otherwise, company policy defines part- v. full-time employees.

If keeping up with payroll is too much as a small business owner give us a call we would be glad to help. Check out our payroll services. 

source: The American Institute of Professional Bookkeepers