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If I Don’t Have Any Employees to Pay, Should I Cancel My Payroll?

So, your hard-working drivers have unexpectedly hit the road. It’s a tough spot to be in. But here’s the thing you might not have thought about – what happens with your payroll? Do you just hit pause? Before you dive into that question, there’s a key factor that’ll shape your move: are you calling it quits or getting back on the hiring track? Your answer sets the stage for what comes next.

If I don’t have any employees to pay, should I cancel my payroll service?

Hiring a New Driver?

When the need arises to hire a new driver, it marks the beginning of a fresh search for the right candidate. This process can be time-consuming, as finding the right fit is difficult. However, during this in between time, what happens to payroll? Despite the absence of wages to report, both state and federal government entities, and potentially local authorities, will continue to expect your tax returns. Your company’s unique circumstances and employment challenges may not be apparent to them. Neglecting to file payroll tax returns could potentially lead to tax assessments, which is an additional concern you don’t need while grappling with driver shortages. To navigate this scenario, it’s imperative to ensure that you, or your chosen payroll service, file a zero-wage return for the tax period in which you have no wages to report.

At our company, we understand that driver retention is difficult, and being in this situation is annoying. We have implemented a $15 weekly fee known as the “missed payroll fee.” This fee serves to offset the time required to keep your tax filings up to date. Unlike other payroll systems, this strategy is intended to relieve you of the burden of paying quarter-end or tax filing expenses. 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 Seeking New Drivers?

It’s crucial to understand the consequences of your decision to stop using your payroll service if your situation makes it more likely than not that you won’t be looking for a replacement driver. If you stopped paying payroll taxes, the IRS and other state and federal agencies would no longer require payroll tax returns from you. If you’re certain of your choice, taking this path may be useful. The process can be reinstated if circumstances change and you desire to restart your payroll service in the future.

However, it’s essential to be aware that discontinuing payroll services or opting for reinstatement isn’t a fee-free process. Our clients encounter a discontinuance or reinstatement fee during such transitions. This fee is designed to cover the administrative and logistical aspects associated with these changes.

Considering the Future:

While discontinuing payroll services might seem like a cost-saving measure when you don’t plan to hire new drivers, it’s important to factor in your future plans. If you envision hiring drivers in the near future, maintaining your payroll service, even during transitioning periods, is a smart choice. This approach ensures that you remain compliant with tax regulations, avoid potential issues, and are prepared for a smoother transition when you do hire new drivers.

Bottom Line:

Navigating payroll management during times of employee turnover demands careful consideration of multiple factors. From hiring new drivers to discontinuing payroll services and the associated fees, each decision holds its own set of implications. As you navigate these decisions, remember that continuing your payroll, even during periods of transition, is essential to avoid tax-related complications and ensure a seamless process for your trucking company’s financial health. If you’re uncertain about the best course of action for your situation, we’re here to provide guidance and support. Contact us if you have any more questions. Also, if you are struggling to retain your drivers, we have many articles about driver retention and that might help you out. 

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Written by Melisa Bush

Before coming to Superior Trucking Payroll Service, in 2011, Melisa worked for a trucking company with 50 trucks. She was the one who processed the driver’s miles and expenses.

Because of this experience, she understands the challenges our clients go through each week while preparing their payroll data for us. Customer service is #1 for Melisa. Her goal is to treat our clients like people with true and real needs, not just another number.

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