Your Payroll Partner
Welcome to Payarc's newsletter!

We are so proud to announce the launches of our Facebook and LinkedIn Page !! Check us out and give us a like!

Please look out for our website launch on our next newsletter!

We are always sharing great content, whether it's updates from the IRS, educational tools, or an interesting article.We are here for you!

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IRS releases revised Form W-4 in November for implementation on January 1, 2020

***iSolved and Efficient Forms has already built in the logic for the new W-4. The new form will be ready for onboarding on Jan, 1 2020.

The final version of the Form W-4 will be released by the IRS this month bringing with it big changes... So whats new?

  1. Allowances are eliminated completely, instead it walks employees through at most 5 steps to calculate withholding.
  2. Currently, when a valid Form W-4 is not on file, the employee is treated as "Single, no allowances". With the elimination of allowances, employees with no valid Form W-4 on file will be assigned the status of "Single w/no adjustments"
  3. IRS is providing a Step 2 mainly for those employees who have additional sources of income, or who wish to have additional tax withheld.
  4. All employees hired after 12/31/19 will have to use the new Form W-4
  5. Existing employees do not have to complete a new Form W-4, unless they wish to change their withholding.

To assist we have provided several links to learn more.

FLSA New Overtime Rule in effect Jan 1, 2020

Starting January 1, 2020 the salary threshold for an "exempt" employee under the Fair Labor Standards Act (FLSA) will increase to $648.00 per week or $35,568 annually.
Employers will need to examine their exempt employees and determine if they meet the new salary requirement, if they no longer meet the criteria they must then be re-classified as non-exempt.

** Ask your payroll specialist to run a report on your salaried exempt employees with their rates.**

IRS raises 401(K) contribution limit to $19,500 in 2020

The limit on catch-up contributions to IRAs for those 50 and older is unchanged at $1,000 annually, but the cap on catch-up contributions for those 50 and older to 401(k)s and other employee plans will rise to $6,500 next year from $6,000 in 2019.

ACA Affordability Threshold Decreases in 2020

Under the Affordable Care Act (ACA) Applicable Large Employers (ALE's) must offer at least 95% of their eligible full time employees quality health insurance coverage, and fulfill all ACA reporting requirements, or risk paying penalties.

Qualifying plans must offer:

  • Minimum Essential Coverage (MEC)
  • Minimum Value (MVP): The plan must pay at least 60% of the costs of covered benefits.
  • Affordable Coverage: A plan is considered affordable if the employee's required contribution for the lowest cost self-only health insurance option offered by the employer does not exceed that years percentage of the employee's household income.For 202, IRS has lowered the affordability threshold not to exceed 9.78 percent of an employee's household income.

Payarc HCM
(916) 757-6777
1430 Blue Oaks Blvd Suite 270
Roseville, CA 95747