Planning to do your own payroll? Though payroll service providers are now popular, there are still companies that micromanage the payroll task. There are those companies, especially small businesses, that are doing their own work. Though it is an additional task on your part, it is doable for small companies to do their own payroll.
Now, if you made up your mind to process your own payroll, here are some basic things that every small business owner should be able to cover.
When is the payday?
Paying your employees for their service is the number one responsibility of businesses. One of the first things that you will have to determine is your company’s pay schedule. Essentially, you want to make sure that employees are paid on schedule. Keep in mind that you don’t want frustration on the part of the employees because you can’t pay them on time.
Why is pay schedule so important? You will also be paying taxes depending on your pay schedule. The usual pay periods may include monthly, weekly, or bi-weekly.
Dealing with taxes
Unfortunately, no one escapes taxes. You must understand that both employees and employers are paying taxes. It is paid usually to both the federal and the state government. However, you will have to know more about the regulations in your area in order to not miss anything. The last thing that you want is to not have any idea about tax laws that you end up paying penalties.
This can become costly plus and troublesome on the part of the company. And because of this, you might want to always stay updated regarding tax laws. Aside from taxation, you should also have an idea about matching the amount contributed by your employees to their Social Security.
Know the necessary forms you need to fill
Paperwork is usually the stressful part of doing your own payroll. If you are dealing with the IRS, most likely, you will need to submit a good number of forms. And the thing with this is that you will have to do it in a timely manner. It is quite common for a lot of businesses to file forms quarterly. However, it is also common to see companies that do it in a monthly manner or in a yearly manner. Since it is a matter of preference, try to also see which schedule works best for you.
Now, you also must understand that you need to have a strategy on how to track the number of hours your employee worked for your business. There are some companies that allow their employees to work from home. In these instances, you will have to make sure that you will have a timekeeping software that helps monitor the work of your employees especially when they are unsupervised at home. And at the same time, this kind of software simultaneously tracks down the number of hours that they’ve worked.
Getting the help of a payroll software
There are some businesses today that are getting the help of payroll software for their needs. The good thing about payroll software is that it can automate most of the payroll requirements that you will need. Among the most common things that you will get from a payroll software include:
- Gross pay calculations for employees
- Automatically calculates for income tax, health insurance deductions, retirement fund, etc.
- Automatically fills out and submit the necessary paperwork for tax reports
- Submit electronic payment for tax
There are different options that you can do if you wish to take care of your own payroll. You can simply hire a payroll team or an accountant depending on the size of your operation. Also, you can do things yourself with the help of a software.
Every business is different. It is important that you know your needs before you even stick to a software. Also, you must understand that there are pros and cons for every software out there. You will have to get to know its interface plus its pros and cons. There are software options that give you the ability to get financial reports as well. Here, you will know more about the performance of your company whether you are getting profits.