1.800.579.9529 paytime.com

In This Issue:

• A Letter from Paytime• Wire Transfer Information• ACA Form 1095-C /

Form 1095-B Deadlines• A Look Ahead • All-in-One HR Management

Solution• Important Dates• Positive Pay Clients• Pay Data Required on

EEO-1 Reports• 2018 Minimum Wage

Increases by State• Labor Law Compliance• 2018 State Unemployment

Taxable Wage Bases• 2018 Unemployment Rate

Determinations• FSA Deferrals• 2018 Qualified Plan Limits• Filing Deposit Frequency

Letters• State & Local Tax Forms• Standard Mileage Rates

for 2018• Federal Contractor Minimum

Wage Increase

2018 Client Payroll Information Guide

Wire Transfer Information Since July 2016, Paytime has been working under new fund transfer rules. Our bank nolonger permits total Automated Clearing House (ACH) transfers greater than $249,999.00.Should your company’s total transfer exceed that amount, Paytime must receive it via a wiretransfer.

We will not release funding, tax payments, or direct deposits until the wire is received.

We have developed a method to automate this process. A 1031 Drawdown, also knownas a Reverse Wire, can be set up at your bank. The 1031 is an agreement between youand your bank that allows for a wire to transfer your payroll funds to Paytime without manualintervention. The funds will still transfer the day before check date, eliminating the possibilityof a delay in service. We have already established this relationship with many of our clients.To enroll, contact John Nasea in Paytime Cash Management at 1.800.579.9529 ext 5778.

A Letter from Paytime

As we wind down another year, now is the time to prepare for the many changes thatwill affect your payroll in 2018. This 2018 Payroll Guide contains valuable informationand updates to assist you in navigating the payroll process.

By now you should have received our 2017 Year-End Packet and the 2018 PaytimeCalendar. For your convenience, the calendar provides a list of bank holidays, Paytimeholidays, and other holidays to be used as a resource when preparing your payroll.

We extend our warmest wishes for a happy, healthy New Year and we are gratefulfor the friendship and confidence you have shown us throughout the years.

As always, if you have questions feel free to contact your Client Service Representative. The Paytime Team

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2018 Client Payroll Information Guide

A Look Ahead Paytime will be closed in observance of the following holidays in 2018:

New Year’s Day Monday, January 1

Memorial Day Monday, May 28

Independence Day Wednesday, July 4

Labor Day Monday, September 3 ThanksgivingThursday, November 22Friday, November 23 Christmas Day Tuesday, December 25

January 2018 – Important Dates January 1 – New Year’s HolidayJanuary 2 – $500 re-end fee for processing 2017 payrollJanuary 8 – $1000 re-end fee for processing 2017 payrollJanuary 15 – MLK/Bank HolidayJanuary 31 – Deadline for W-2 to be distributed to employees (and forms 1095C/1095B) January 31 – Paytime files W-2s with the SSA

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All-in-One HR Management Solution Easily recruit, retain, and manage your workforce in one simple solution. Ask a Paytime team member about our workforce management platforms.

Click to learn more.

ACA Form 1095-C / Form 1095-B Deadlines to Employees and IRS

The IRS deadline for applicable large employers (those with 50 or more full-time or full-time equivalent employees) to distribute Form 1095-C to employees is March 2nd, 2018.The same applies to small employers with self-funded plans, who will distribute Form 1095-B to employees.

The distribution of these forms is one part of the reporting requirements under the Affordable Care Act for employers who are subject to the Employer Mandate.

Employers must file the 2017 Forms 1094-B and 1095-B (for small employers with self-funded plans) or Forms 1094-C and 1095-C (for applicable large employers) with the IRS by February 28, 2018, for paper filing, or March 31, 2018, if filing electronically. Employers with fewer than 50 full-time or full-time equivalent employees are not subject to these reporting requirements or to the ACA mandate itself.

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The Equal Employment Opportunity Commission (EEOC) hasannounced that it will require employers with 100 or moreemployees to submit summary pay data and total hoursworked for the year as part of the annual EEO-1 report.

The first report, capturing data from 2017, will be due March31, 2018. In subsequent years, March 31 will become the newannual deadline for EEO-1 reports - a change from September30. As a result of pushing the reporting date from Septemberto March, no reporting was due in 2017.

On the new form, federal contractors and subcontractors with50 to 99 employees will not report summary pay data or hours,but they will continue to report employees by job category aswell as by sex and ethnicity or race.

Continuing with the current practice, employers with 99 orfewer employees and Federal contractors and subcontractors

with 49 or fewer employees will not be required to complete the EEO-1 report.

EEO-1 reporting of sex and ethnicity or race is based on countstaken during the “workforce snapshot period.” For reportingyears 2016 and earlier, the “workforce snapshot period” wasJuly 1 to September 30. Starting with the EEO-1 report of 2017data, however, the “workforce snapshot period” will be October1 to December 31. An employer may choose any pay periodduring this three-month “workforce snapshot period” to countits full and part-time employees for the EEO-1 report.

According to the EEOC, the new requirement is intended tohelp decrease pay disparities based on gender and race orethnicity. The EEOC will use the collected data to help itinvestigate and identify unlawful pay discrimination. It willtherefore be important for employers to ensure that theyhave systems in place to collect the required data and correctany pay disparities that cannot be explained by legitimatebusiness factors.

Pay Data Required on EEO-1 Reports for Employers with 100 or More Employees

Each month a report is sent to all Paytime Positive Pay Clients listing checks that were created in 2017, but have not yet cleared.Each state requires employers to attempt to contact any employee who has not cashed their paycheck during the year.

If an employer is unable to locate the employee, they are required by law to turn the funds over to the state’s Unclaimed PropertiesDepartment. If the paycheck is lost, please contact Paytime to find out if the check has been cashed. Paytime can place a “stoppayment” on the missing paycheck and a replacement check can be issued..

If you have any questions, please contact your Client Service Representative.

Paytime Positive Pay Clients

2018 Client Payroll Information Guide

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Several states have announced minimum wageincreases for 2018.

Twenty-seven states plus Washington, DC index theirminimum wages to rise automatically with the cost of living. More states will index minimum wage increases annually.

To view a list of state minimum wage rates for 2018, click here.

Note: State minimum wages can vary by city or county and may change during the calendar year. We encourage you to check with your state department of labor for rates and wages specific to your location.

Ohio Minimum Wage Increase

On January 1, 2018, Ohio’s minimum wage will increase from $8.15 to $8.30 per hour. The minimum cash wagefor tipped employees will increase from $4.08 to $4.13 per hour.

The state minimum wage applies only to employers who gross more than $305,000. Employers who grossless than $305,000 must pay their employees no less than the current federal minimum wage rate.

We recommend that you review the pay rates of your employees to ensure compliance with the new minimumwage rates.

Labor Law Compliance ProgramIf you have not subscribed to our Labor Law Poster update program, please contact your Client Service Representative who will assist you with Labor Law Poster Compliance. To read more about our Labor Law Poster Compliance Program click here.

Remember, by law you are required to post these notices. If you have additional questions or concerns, pleasecontact us at cs@paytime.com.

2018 Minimum Wage Increases By State

2018 Client Payroll Information Guide

PLEASE NOTE: If you are a Payentry, Remote, or Workforce Ready client it is your responsibility to enter the new minimum wage rates before your 2018 payroll is processed.

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2018 State Unemployment Taxable Wage Bases

States/Territory 2018 2017 States/Territory 2018 2017

Alabama 8,000 8,000 Nebraska 9,000 9,000

Alaska 39,500 39,800 Nevada 30,500 29,500

Arizona 7,000 7,000 New Hampshire 14,000 14,000

Arkansas 10,000 12,000 New Jersey 33,700 33,500

California 7,000 7,000 New Mexico 24,200 24,300

Colorado 12,600 12,500 New York 11,100 10,900

Connecticut 15,000 15,000 North Carolina 23,500 23,100

Delaware 16,500 18,500 North Dakota 35,500 35,100

Dist. Of Columbia 9,000 9,000 Ohio 9,500 9,000

Florida 7,000 7,000 Oklahoma 17,600 17,700

Georgia 9,500 9,500 Oregon 39,300 38,400

Hawaii 45,900 44,000 Pennsylvania 10,000 9,750

Idaho 38,200 37,800 Puerto Rico 7,000

Illinois 12,960 12,960 Rhode Island *23,000 22,400

Indiana 9,500 9,500 South Carolina 14,000 14,000

Iowa 29,900 29,300 South Dakota 15,000 15,000

Kansas 14,000 14,000 Tennessee 8,000 8,000

Kentucky 10,200 10,200 Texas 9,000 9,000

Louisiana 7,700 7,700 Utah 34,300 33,100

Maine 12,000 12,000 Vermont 17,600 17,300

Maryland 8,500 8,500 Virgin Islands 23,500

Massachusetts 15,000 15,000 Virginia 8,000 8,000

Michigan 9,500 Washington 47,300 45,000

Minnesota 32,000 32,000 West Virginia 12,000 12,000

Mississippi 14,000 14,000 Wisconsin 14,000 14,000

Missouri 12,500 13,000 Wyoming 24,700 25,400

Montana 32,000 31,400

This information is obtained from the American Payroll Association. The states in BOLD have changed their rates for 2018.

*Rhode Island - The 2018 taxable wage base for employers in the highest UI tax rate group is $24,500

2018 Client Payroll Information Guide

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FICA rate will be:Social Security: 6.2%Medicare: 1.45% 2.35% (wages over 200k)

It is very important that all state unemployment rate determinations for2018 be forwarded to our tax department as soon as they are received.Most state unemployment rates change every year and Paytime will beusing last year’s rate until the 2018 rate is received. Paytime will not beresponsible for penalties and interest related to new rates not beingreceived in a timely manner. If you do not receive a rate determination,contact your taxing agency. In addition, please forward all 1st quarterstate unemployment returns to Paytime. Some states only issue thenew rate with the 1st quarter returns.

For plan year 2018, the dollar limitation under 125(i) on voluntaryemployee salary reductions for contributions to health flexiblespending arrangements (FSAs) has increased to $2,650.

2018 Rates & Taxable Wage Base

Unemployment Rate Determinations

FSA Deferrals

2018 Client Payroll Information Guide

Social Security Wage Base $128,400.00

Social Security Tax Limit $7,960.80

Medicare Wage Base Unlimited

Federal Income Tax Rate 2018 Fed. Tax Table

Federal Unemployment Wage Base $7,000.00

Ohio Unemployment Wage Base $9,500.00

Other States UWB See chart on page 5

401(k) 403(b) Annual Employee Deferral $18,500.00

401(k) 403(b) Catch-up Contribution $6,000.00

Supplemental Tax Rate 25%

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Near the end of the year you will receive a letter from the IRS informing you of your2018 tax frequency for any federal payments. If your tax liability from July1, 2016 to June 30, 2017 was over $50,000.00, you are required to make your paymentssemi-weekly. If the liability of all your taxes owed to the Federal government is over $200,000.00 you are required to make your payments via EFT (electronic funds transfer).

Failure to follow this regulation will cost you penalty and interest. It is importantthat state frequency letters are forwarded to Paytime as soon as they are received.

At the end of the year you will be receiving state, city, and school district formsor coupon books. If you receive forms from an agency in which you are not located,please notify us. This may mean the agency still has you listed as active and a final return will need to be submitted. Also compare any coupon you receivewith a recent Payroll Summary to see if the account number and frequency match. Please notify our Tax Department if a change needs to be made.

Type of Limitation 2018

Elective Deferrals 401(k), 403 (b), etc. 18,500

Defined Benefit Plans 220,000

Defined Contribution Plans 55,000

Annual Compensation Limit 275,000

457 (b) (2) and 457(c) (1) Limits 18,500

Catch Up Contribution (401k) (403b) (457) 6,000

Highly Compensated 120,000

Key Employee Definition Limit 175,000

SIMPLE Retirement Accounts 12,500

SIMPLE Catch Up Contribution 3,000

SEP Coverage 600

SEP Compensation 275,000

IRA Limit 5,500

IRA Catch-Up 1,000

2018 Qualified Plan Limits

Filing Deposit Frequency Letters

State & Local Tax Forms

2018 Client Payroll Information Guide

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Federal Contractor Minimum Wage Increase The minimum wage for federal contractors will increase to $10.35 per hour as of January 1, 2018. The wage requirement applies to new and replacement contracts (solicited on or after January 1, 2015) with employers covered by the Service Contract Act or any employer who handles concessions and services in connection with federal property or lands. We recommend that employers review the pay rates of their employees and plan any changes necessary to comply with the rate increase.

The Internal Revenue Service issued the 2018 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2018, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 54.5 cents for every mile of business travel driven, up 1 cent from the rate for 2017.• 18 cents per mile driven for medical or moving purposes, up 1 cent from the rate for 2017.• 14 cents per mile driven in service of charitable organizations.

The business mileage rate and the medical and moving expense rates each increased 1 cent per mile from the rates for 2017. The charitable rate is set by statute and remains unchanged.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

Standard Mileage Rates for 2018 Up from Rates for 2017

2018 Client Payroll Information Guide