7 JULY 2026 WorldWide Drilling Resource® Drilling Into Money Not Boring by Mark E. Battersby Solutions for Today’s Payroll Problems Every employer faces countless rules and regulations which are constantly in flux and that regulate payments made by a drilling business to its workers. Problems with a drilling operation’s payroll are alltoo-common. Since mishaps can occur at any time, those responsible for payroll need to be prepared for problems such as these basic errors: 4 Failure to Withhold and Pay Payroll Taxes - Every employer is required to withhold federal (and often state) income tax from the wages of employees. Failure to pay these taxes after withholding them from an employee’s wages or salary usually leads to hefty fines and penalties. 4 Incorrect Working Hours - Tracking time can be challenging, especially for a small drilling operation. Potential problems multiply for businesses with several jobsites and varying pay structures. Inaccurate tracking of employee’s work hours or overtime often occurs for simple reasons such as: • Not accounting for travel between worksites • Working through breaks • Incorrectly logging overtime hours • Time required outside regular business hours for things such as training Part-time and seasonal employees are subject to the same withholding rules which apply to the drilling operation’s other employees. In other words, an employer must withhold federal income tax, Medicare, and Social Security, as well as pay state and federal unemployment taxes. And, misclassifying seasonal or part-time workers as independent contractors can result in severe financial penalties. All employees (full-time, part-time, or seasonal) must complete a Form W-4, Employee’s Withholding Certificate, before their first shift in order for their employer to determine the correct tax withholding amount. Social Security and Medicare taxes are based on the amount of each payroll check up to the annual limits. Employers are responsible for both federal and state unemployment taxes, taxes which are based on the first several thousands of dollars of an employee’s wages. Employers of seasonal labor must submit Form 941, Employer’s Quarterly Federal Income Tax Return, but only for the quarters when wages are paid and amounts withheld. Of course, Form W-2 must be provided every employee. Understanding the basic rules for withholding payroll taxes - and paying over the withheld amounts - on the wages of all employees is vital. Keeping up to date with any changes to the payroll withholding rules - both federal and state - is important. Guidance from a professional can help avoid potential problems with the drilling operation’s payroll. Mark Mark E. Battersby may be contacted via e-mail to michele@ worldwidedrillingresource.com
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