If you own or operate a dispensary, you know there is a lot to keep track of. But one of the more critical metrics to monitor are your numbers. Data, sales, expenses and salaries are just a few critical components, but today we are going to focus on one key topic: dispensary payroll.
This article will explain five ways you can leverage dispensary payroll to stay compliant in your dispensary.
What is dispensary payroll?
Dispensary Payroll is the act of running payroll at your dispensary - it is similar to payroll of a standard business, however you may need to keep special track of tax deductions and remittances due to tax laws like the 280E.
Payroll can be done manually, outsourced, or done using in-house dispensary payroll software.
In this article we will cover how dispensary payroll software specifically can help keep you compliant.
Why use dispensary payroll software?
Dispensary payroll software is cloud-based payroll software that helps manage the employee payroll of a dispensary. It's easy to use and can be accessed from anywhere. This type of software is used by dispensaries worldwide, from Canada to California and more.
Dispensary payroll software is designed for dispensaries that want an efficient way to handle their employees. It has all the payroll features you need to manage your employees' payroll, including direct deposit, automated tax calculations including deductions and remittances, overtime calculations, and more.
Why do dispensaries need unique payroll?
The unique regulatory environment of the cannabis industry requires a payroll and HR solution that is both comprehensive and compliant.
Dispensaries are also unique because they need to consider many different factors when setting up a dispensary pay system. Some factors include employee schedules, overtime hours, and other things that make up a dispensary's overall work environment.
These factors mean that dispensaries need a strong system for managing labor costs. Dispensaries should consider using a payroll system provider with an integrated solution. This approach allows the dispensary to gather data from multiple locations without investing time and money in developing software for each location separately.
The most important aspect of any payroll solution for dispensaries is that it must integrate with other functions in the dispensary. These include time tracking schedules and POS systems. An integrated dispensary system provides accurate metrics about how much labor is being used versus sales revenue at each location (and across all locations).
Dispensaries also need a payroll system that can handle multiple departments within their organization. A dispensary may have various departments with different needs, such as accounting and human resources (HR).
Each department will have its requirements for an HR solution to integrate with the rest of the organization's processes. A good HR software provider can provide dispensary managers with a comprehensive HR solution that meets all their needs while remaining compliant with state regulations.
Additionally, medical and recreational dispensaries also have strict regulations about work hours that employees must adhere to in order to maintain their licenses. Dispensary payroll solutions must have accurate time tracking capabilities for managers and HR departments to comply with such labor laws.
How can dispensary payroll software help keep you compliant?
Regarding compliance, it's important to ensure you're keeping track of all the information that needs to be submitted to the government and your employees.
Integrated dispensary payroll software is one way to ensure you're on top of things. With it, you can keep track of the time each employee spends working and when they are scheduled for vacation. You can also use it to ensure that employees are getting paid correctly, calculate taxes, and pay them accordingly.
With the right dispensary payroll services, you can take care of everything from submitting paperwork to helping you calculate employee overtime or holiday pay. These systems will help ensure that your company is complying with state laws and regulations while also providing peace of mind knowing that all the information required will be available at a glance.
Here are five ways you can leverage the right dispensary payroll service to stay compliant in the cannabis industry:
1 - Hours can be tracked and streamlined.
Time-tracking of staff hours is an important feature to any dispensary. But they can also be a major drain on resources, so you need a dispensary payroll system that integrates with your time-tracking software, so you can simply streamline approved clocked hours to payroll, and voila, payroll is done.
Time tracking integrated with facial recognition technology means the system can recognize who's working and when. This makes it easier for employees to prove if someone has been working on the job or not.
This means you don't have to worry about taking screenshots of employees' timesheets or logging them in manually. It also provides proof in case of any labor law violations. That way, when the time comes for audits and other major compliance steps, your business is prepared for any legal actions.
2 - It can automate overtime and stat pay calculations.
Manual calculation of overtime, holiday and statutory holiday pay are time-consuming, error-prone and prone to human error. Dispensary payroll software automates this process by calculating the amount of time worked in a shift based on your business rules.
This cool can help in managing the employee pay, attendance, leave and other records from a single source. It can use the data to estimate hours worked and the rate of pay. The system can also handle variations in revenue, such as commission or overtime.
The payroll system factors the number of hours worked per day, number of days in a week, number of shifts worked per week etc. Automating this process with dispensary software ensures no underpayment or overpayment of wages due to human error. The system ensures that employees are paid correctly for all work shifts at each location.
Overtime and statutory pay recorded on the dispensary payroll prove that employees are paid correctly and on time, protecting you against lawsuits brought by employees who believe they were not paid properly.
3 - It can help you navigate the 280E code.
The Internal Revenue Code (IRC) section 280E bars businesses from taking deductions for any amount of money related to the sale of recreational marijuana. The 280E is sometimes difficult to understand as a dispensary. It implies that you pay taxes on gross profit rather than net income.
One way to lessen the tax burden effect on your dispensary is proper accounting and compliance. For example, if you don't track how many hours your employees work each week, you may pay too many taxes on employees' wages.
Moreover, the more experienced your employees are with the 280E code, the more likely they can follow its rules. Your employees should know how it works and what qualifies as an improper fringe benefit.
To avoid penalties under 280E, you must keep good records of your sales and expenses. Dispensary payroll can help ensure that all sales and costs are accounted for properly. It will also help eliminate confusion over who owes what to whom when it comes time for audits or tax filings.
In addition to tax and audit filing, you'll have to track time spent on each task to determine how many hours are deductible under the 280e tax code. However, different employees may fall under other tax codes—for example, a part-time budtender and part-time cultivator.
When you have employees who perform multiple tasks, the dispensary payroll makes it easy to track each employee's hours separately and calculate the deductible at a single stroke.
4 - It makes payroll tax easy and legal.
For most cannabis dispensaries, calculating and paying payroll taxes can be a time-consuming task with an increased risk of mistakes that can lead to costly penalties. However, the right dispensary payroll software can help you automate manual tax calculations, reduce time, and increase efficiency.
KayaPush dispensary payroll, for example, allows you to set up automatic calculations for state-mandated deductions, remittances and other tax calculations. These remittances are deducted from employees' paychecks and automatically remitted to the government.
Employers are responsible for withholding and remitting employment taxes to the appropriate authorities, such as the IRS. Failure to do so can result in large fines and penalties—and even worse: jail time.
If you run a multi-location dispensary, the KayaPush payroll is available in Canada and 13 of the most popular states. These taxes will be automatically deducted from employees' paychecks by the KayaPush payroll to remain in compliance with the IRS and other cannabis law enforcement.
5 - It integrates with your HR system.
Payroll is one of the most important and integral components of a business. HR managers must have all the information they need to keep payroll on time, manage staff members' licensure and tax payments, and track their payment methods with ease―without sacrificing compliance.
They key to a streamlined operation is to use a dispensary payroll software that can easily integrate with your HR system. This cuts back on the time-consuming, manual tasks of employee time cards, payroll records and reporting into one convenient solution.
You can track employee hours and payroll taxes by integrating your payroll with your HR system. This system will keep you and your employees on top of their duties while reducing your time complying with regulations.
Dispensary payroll software can adapt to your changing needs. Features can be added, removed, or rearranged with a few clicks of a button. This feature saves employers time, improves efficiency, and adds easy compliance with local regulations.
With the right dispensary payroll software, you can reduce your HR burden, hire the right people and keep your business running smoothly. Plus, with this system in place, it will be much easier for you to employ top-quality employees for your dispensary. All the information they need to apply for a job at your facility will be readily available.
How can you save time running your dispensary?
Marijuana businesses face a complex legal and regulatory environment, especially regarding sales taxes, accounting and state compliance. KayaPush HR and Payroll software mitigates all of this complexity, helping to drive your cannabis business forward.
As a dispensary owner, relying on a payroll service that offers useful features like tax forms, analytics, eligibility tracking, and flexible payment options is vital. There are some other features as well which can be included or excluded depending on your requirements.
KayaPush HR and dispensary payroll is specifically designed for dispensaries to automate employee data collection and manage compliance. You can set up this automation easily and focus on your business's growth. Book a Demo Call now.
Want to learn more about how to manage dispensary payroll? Download our free guide below!
