Mid-Year Payroll Compliance Updates: What You Need to Know for 2025
Monday, August 25, 2025
As we move through Q3, it’s a good time to check in on recent payroll compliance developments that could affect your business. From new federal legislation to upcoming state-specific tax changes, staying informed is crucial for maintaining accurate payroll and avoiding costly errors.
Here are the key updates every small business should know:
🧾 New Federal Legislation Impacts Tip & Overtime Deductions
On July 4, 2025, a major legislative bill was signed into law, introducing new tax provisions that could affect payroll and individual tax filing. One key change: tip and overtime earnings may now be eligible for a deduction at the federal level.
What does this mean for your business?
- This deduction won’t change the wages you pay employees.
- It also won’t impact the gross pay reflected on employee paychecks.
- Instead, it’s a tax-time credit individuals may be able to claim when filing their return.
We’re currently awaiting further guidance from the IRS regarding how this change will be reported on payroll forms. Once that guidance is released, J&S Accounting, along with platforms like QuickBooks, will update the necessary forms and workflows to ensure compliance.
📌 Action Step: No changes are needed on your end for now, but keep an eye out for further instructions later in the year.
🍑 Georgia Payroll Update: Withholding Reminders & 2025 State Tax Rate
While Georgia has not announced any new employer payroll tax rates for 2025, there are a few important reminders and updates:
✅ 1. Georgia State Income Tax Rate
- As of 2025, Georgia’s flat income tax rate is 5.39% (lowered from 5.75% in previous years).
- Make sure your payroll system reflects the new rate.
✅ 2. Employee Withholding Adjustments
- With Georgia’s shift to a flat tax, employees may wish to adjust their G-4 withholding forms to better reflect their updated tax situation.
- Encourage employees to review their withholdings to avoid surprises next tax season.
✅ 3. Local Filings for Some GA Cities
- Some Georgia municipalities (like Atlanta) require local occupational taxes or business license renewals, which can sometimes be missed in payroll planning.
- Be sure you're compliant with your city or county’s local business tax requirements.
📌 What to do: Let us review your payroll system and employee withholdings to ensure your business is aligned with Georgia’s latest updates.
📌 Want information for a different state? Check out this website- Compliance Blog: Information on new taxes, state rate issues, and more!
✅ What J&S Accounting Clients Should Do Now
These types of updates, from federal tax deductions to state-specific employer tax rates, are why we keep close tabs on payroll compliance year-round. Our goal is to keep you informed, compliant, and stress-free.
Here’s how we can help:
- Proactive monitoring of federal and state tax changes
- Payroll software support and system updates
- Clear communication on how changes impact your business and employees
If you have any employees with tips, overtime, or work in New York, and you’re unsure how these updates affect your payroll process, don’t hesitate to reach out.
Let’s keep your business compliant and your payroll running smoothly.
J&S Accounting are here for you!
About J&S Accounting
At J&S Accounting, we provide expert bookkeeping services tailored to the unique needs of small businesses and non-profits. We recognize the challenges that come with maintaining accurate financial records and how vital this is for the smooth operation and growth of your business. As a woman and minority-owned firm, we’re proud to offer our expertise to businesses in Savannah, GA, and across the nation, helping them navigate financial complexities and achieve better financial management.
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Disclaimer:This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business from a professional accountant. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. J&S Accounting does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. J&S Accounting does not warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers and viewers should verify statements before relying on them.
© 2023 J&S Accounting. All Rights Reserved.
Disclaimer
This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business from a professional accountant. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. J&S Accounting does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. J&S Accounting does not warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers and viewers should verify statements before relying on them.