As a small business, you may be wondering how to manage payroll. Read on to learn more on the few tips to help you in managing your business’s payroll.
Employers
Employers of small businesses must manage payroll accurately and on time or face legal consequences. While it can be time-consuming, it is essential for employers to comply with payroll laws and regulations. Small businesses must also categorize employees correctly to avoid penalties from the IRS and minimum wage laws. In addition, they must pay wages and taxes on employees and check with their state to ensure they are not liable for back taxes and wages.
For those who manage payroll themselves, there are some steps they should take before running the payroll. First, they should review pay rates for each employee and check overtime hours, as tips are often counted as hourly pay in some states. They should also review W-2 forms to ensure accuracy. If they are not accurate, they should hire a payroll administrator. Payroll administrators can audit their system and ensure the accuracy of W-2 forms. Reviewing payroll reports before tax season is essential, as mistakes can cost small businesses hundreds of dollars.
Process
As a small business owner, you must follow a strict set of guidelines and rules regarding processing your small business payroll. To start, you must ensure that your employees are correctly paid. Often, small business owners will transfer payroll payments by direct deposit. However, setting up an account for small business payroll makes tracking expenses, taxes, and payments much more manageable. To avoid problems with paying taxes and paying your employees, keep the following tips in mind:
A proper payroll process is necessary for a small business owner because processing it incorrectly can anger your employees and the IRS. You must learn more about payroll processes and accounting software to avoid such problems. It is advisable to break down these steps into several smaller steps. To save time, we recommend using software that automates payroll processing. You can also download a free PDF of the process to follow it step-by-step.
Software
Payroll software is available for large and small businesses alike. Payroll software for small business allows for flexible payrolls, such as hourly wages and commissions. In addition, it enables the processing of both regular and independent contractors’ salaries and wages. Small businesses with fewer than 25 employees may be better served with other solutions. QuickBooks is a great place to start if your company does not require a high level of detail. In addition to being user-friendly, QuickBooks also works across computers, tablets, and smartphones.
The best small business payroll software makes managing employees’ wages, taxes, and benefits easy for you and your team. It is essential to running a small business since it ensures that you pay your employees on time, pay their benefits, and provide clear information on their wages and taxes. Moreover, these solutions make managing payroll easy for businesses of all sizes.
Compliance
As a small business, you’re likely well aware of the importance of maintaining compliance with payroll laws. Whether you’re managing payroll in-house or using an external provider, there are a variety of things you should be aware of. You can easily keep up with compliance requirements by checking out the Small Business Administration’s e-newsletter or examining the Department of Labor website. For additional information, consider joining the Society of Human Resource Management, which has a wealth of information about payroll laws. The cost is $219 a year but will allow you to access society’s expertise on payroll laws.
While payroll mistakes can cost small businesses hundreds of dollars, you can protect yourself by regularly reviewing your records to ensure they are accurate and compliant. If you are unsure of the proper payroll processes, consider hiring an administrator to perform the necessary tasks. Payroll administrators can audit your system and ensure that the W-2 forms are accurate. Keeping track of payroll information is crucial, particularly before tax season. Ensure your payroll system is up to par with federal and state laws to protect yourself from penalties.
