US Payroll Updates for the Small Businesses - 2019

US Payroll Updates for the Small Businesses - 2019

Get in-depth information about the latest payroll updates in the United States region.

According to the United States Small Business Economic Profile report, small businesses employ 47.5% of all workers in the U.S region. If your business organization falls under the small business category, your payroll is likely to change in the year 2019. Check out the important snapshots about the U.S payroll updates in 2019.

1. Minimum wage rules: The federal minimum wage rate is unchanged at $7.25 per hour, state and local rates apply if they are higher than the federal rate. Minimum wages have been increased in the 20 states effective from Jan 1st, 2019.

2. Introduction of employment posters: Office staffs who employ suitable manpower for their organization are required to show posters which should report applicable minimum wage rates and certain other information. Check with DOL, OSHA, and your state labor department for free posters. You can also buy the posters from Amazon, Staples, etc.

3. Elective deferral plans: If your organization provides a retirement plan with the salary reduction option (elective deferrals by employees), the limits for 2019 have increased over 2018 amounts.

4. Social security wages: The social security tax is a very important element in the Federal Insurance Contributions Act. Based on the wage limit, an employer/employee should pay 6.2% of social security tax. In the year 2019, this limit is increased from $128,400 (2018) to $132,000.

5. New FSA limits: The compensation on medical flexible spending accounts (FSAs) is increased from $2,650 in 2018 to $2,700 in 2019. However, the limit for dependent care FSAs is $5,000, which is a fixed amount that’s not adjusted annually for inflation.

6. Transportation benefits: Transportation benefits to employees such as free parking, van pooling and transit passes - the receivable tax-free amount is increased from $265/month to $270/month in the year 2019. The IRS has provided guidance to employers on how to identify the nondeductible portion of their lease payments if they include free parking for employees.

7. Medical coverage options: The account limits for health savings scheme have increased. Qualified small employer health reimbursement arrangements (QSEHRAs) have increased contribution amounts.

8. Labor compensation costs: The premium rate may be higher, lower, or unchanged for 2019. Check with your state to determine what you have to pay, and for whom. For example, an S corporation owner may be able to opt out of coverage.

9. Unemployment tax updates: Check with your state for any recent changes in the unemployment tax rates. These changes may occur usually due to changes in the laws & regulations.

10. State-based employment laws: Your state authority may have other new regulations for 2019 in addition to those listed above. For example, an Oregon Equal Pay Law, effective January 1, 2019, prohibits employers from paying employees different amounts for the same or comparable work.


Payroll management is a hectic process when it comes to large organizations. As a result, knowing the latest updates is essential to make smart decisions at the right time.