Do you know how to do small business payroll? Want to make sure doing payroll is as easy as possible?
Managing payroll can be one of the trickiest business functions to deal with as a small business owner. Once you start managing payroll for multiple employees, dealing with payroll can be a headache. If you don’t know some of the best tactics for doing it, you can easily get overwhelmed.
Luckily, we’re here to help. Below we’ll give you our top tips for doing small business payroll every year.
1. Decide How and When to Pay Your Employees
One of the first things you’ll need to think about when doing payroll for your business is how and when you’ll pay your employees.
First of all, you should choose whether your employees will be hourly or salaried. While both are good options, salaried employees can be a bit easier to deal with as you won’t have to track hours as closely.
Similarly, you should also choose whether to pay your employees, weekly, bi-weekly or monthly. While paying monthly may be a bit easier as an employer, it may be better for your employees if you pay them more often.
Additionally, you may want to use a PayStubCreator to ensure that your employees always have accurate documentation for their work.
2. Ensure You’re Compliant With the IRS
When doing payroll for your small business, it’s also important to pay attention to and comply with the standards set by the IRS. You should aim to be as organized as possible.
Be sure that you’ve set up your payroll system well and that you’re documenting your employees correctly from the very beginning. Your business needs to have an employer identification number (EIN) and you should also pay attention to any locally specific laws and regulations.
Be sure to speak with a tax professional and check important regulations on the IRS website to ensure you’re remaining compliant throughout the year.
3. Double-Check Everything
When doing your payroll, you should make sure that you double-check everything you do for accuracy. You should review your documents carefully and double-check them all to ensure you’re not making any mistakes.
While typos and mistakes can be frustrating when doing payroll throughout the year, it can be especially costly and problematic when you do it on important tax forms. When doing payroll taxes, be sure to check, double-check and triple-check any important figures, numbers, and items you fill out on your forms.
4. Avoid Payroll Tax Fines
When doing small business payroll, you should also ensure that you’re paying attention to the payroll tax deadline for the year.
If you miss the mark on filing the W-2s for your business you’ll be fined based on how late you are. W-2s that are late by 30 days will incur a $50 fine, while those that are filed beyond 30 days but less than 6 months will cost you $100. You may get fined at least $260 after the 6-month mark.
Employees need this information quickly to ensure that they can file their own taxes, so it’s crucial that you get your W-2s in on time.
5. Learn About Your Payroll Write-Offs
Before doing your payroll taxes you also need to make sure you know about all of the write-offs you can do.
While it can be costly to have employees on your payroll, you’ll be able to write-off quite a few things on your business taxes as a result. Among other things, you’ll be able to write off employee wages, paid vacation days, as well as paid contributions to Social Security, Medicare, and unemployment.
Be sure that you do your research and ensure you know exactly what you can write off before it’s time to file your payroll taxes.
Understanding How to Do Small Business Payroll
If you’re wondering how to do small business payroll, using the tips above can help. By following the strategies above and double-checking yourself every step of the way, you’ll find that doing payroll isn’t as hard as you thought it would be.
Looking for more business and financial tips? Explore our blog now to find more helpful advice and useful guides.