The midway mark in the calendar year signifies a checkpoint for the Bureau of Workers Compensation (BWC). The BWC Annual True-up reports are due soon and while many companies are ready, some may still be a little fuzzy about the new process and timeline.
This is the second year for annual True-up reporting. Most private employers are on a bi-monthly payment installment schedule (other than the minimum payers). If employers wish to elect a monthly installment option, they can make the change annually prior to the start of the new policy year,
What is True-up reporting?
A true-up is a report filed annually that reflects the actual payroll for the previous policy year. To maintain workers compensation coverage, state-fund employers are required to submit a true-up report in addition to paying their premium installment payments to the BWC. In defining payroll, BWC generally follows the guidelines of the Ohio Department of Job and Family Services and Federal Unemployment Tax Authority (FUTA).
The following items are considered payroll items and should be included on the payroll report:
- Gross hourly wages and gross salaries less qualifying deductions for section 125 cafeteria plan benefits
- Sick pay (including third party, excluding workers’ compensation)
- Bonus payments including stock given as a bonus
- All sales commissions
- All tips
- Severance pay
- Overtime pay
- All stock gifts
- Profit sharing going directly to employees as payroll
- Any voluntary employee contributions to retirement plans, including 401K
- Any portion of cafeteria plans as reportable to FUTA, such as cash options and unqualified benefits
- Reasonable value of board, lodging, house or room rent unless provided for the convenience of the employer
- Per diems and traveling expense is reportable if this amount exceeds one-third of the employee’s total remuneration. Total remuneration includes both the regular wages and per diems and traveling expense. The amount of per diem and/or traveling expense that exceeds one-third of the total remuneration is reportable
- Contributions to deferred compensation by employees (except for government employees)
- Expenses exceeding one-third of an employee’s normal pay
- Personal use of a company car
The quickest and easiest way to report is online at www.bwc.ohio.gov. You must have a BWC e-account, which is easily created at www.bwc.ohio.gov. The BWC true-up report for the July 1, 2016 – June 30, 2017 policy period will be available July 1 and reports must be filed by August 15, 2017. Even if a company had no payroll, or the payroll matches the estimate provided by BWC, a business is still required to report.
If there is a difference in the employer’s actual payroll and their estimated annual premium (EAP), the employer will either be refunded or assessed the difference in premiums.
A little history: prior to the adoption of the yearly true-up report, a semi-annual report was required for all companies reporting payroll. The annual true-up report and the installment payments now lessen the burden on businesses as the business can make smaller payments throughout the year; a more manageable approach for many business owners.
Preparing a True-up report
Some clients have asked who should prepare their true-up report. Simply, if you prepare your own payroll, you can file the true-up report yourself. If you have a payroll company, you should inquire if they prepare the report or if you need to prepare it. If you retain a firm, such as our Zinner & Co. outsourced bookkeeping services, then that entity will file the true-up report for your company.
The BWC website is the preferred way to complete the True-up, however, if personal assistance is required, one can call the BWC customer contact center at 1-800-644-6292, however, wait times can be long.
Keep in mind, when reporting payroll, owners and officers are subject to minimum and maximum reporting requirements. If you have questions about how the requirements affect your business, need help preparing your True-up, or would like to have a conversation about the benefit of our outsourced payroll and reporting services, contact us at [email protected] or 216.831.0733; we are happy to help and ready to start the conversation.