We’ll set up your payroll for you with QuickBooks Payroll Elite. With QuickBooks Payroll Premium, we’ll review your setup to make sure everything is correct. Learn how to get set up, pay your team, find HRsupport and benefits, and sync with accounting soyou can manage everything in one place. If managing payroll becomes too complex, hiring a specialist can save you time and reduce the risk of errors. We mentioned earlier that some owners handle this task on their own or bring on a dedicated specialist. Some of these professionals must earn certifications where they put their skills to the test.
Some providers can also help make sure that important payroll forms, such as Form 941 which are filed each quarter, and Form 940 which is filed on time at the end of each year. Full-service payroll typically implies an all-in-one solution, meaning everything you need is included. Depending on the product, users might enjoy features like automatic payroll tax deductions, automated tax filing, digital pay stubs, and same-day direct deposit. If you manage benefits such as health insurance or retirement plans through a payroll service, it might also be able to make payments to those providers for your business. Or, if you’re managing benefits in-house, you’ll have to make benefit payments on behalf of your employees.
Notate on the spreadsheet the total gross wages and overtime wages earned for each employee. Find out when you need to pay taxes to state and federal entities. You’ll need to withhold tax amounts and forward the totals at the appropriate time. Be mindful of simple updates — like new addresses — and watch for adjustments that affect pay rates, deductions or taxes. A recent pay raise could affect the pay rate, for example, while benefit elections could affect deductions and an updated W-4 could affect an employee’s tax withholdings.
How to Set Up Payroll for Small Businesses in 8 Easy Steps
- But there are also some companies that use pay cards and others even use cash.
- For employees who have temporary work visas, pay attention to expiration dates, since employers are responsible for knowing when to update employment forms without official notice.
- Deduct all the tax withholdings and deductions from the gross pay.
- Reconciling payroll essentially means checking your work and making sure your expected payroll matches your actual payroll.
It’s not the kind of business responsibility you want to get wrong. That’s why small business owners must have a clear understanding of payroll prior to hiring their first employee. While federal requirements don’t dictate how to store these records, the IRS recommends that you keep the data well organized — such as by fiscal year — and safe from threats like flooding.
Pay Employees
Payroll will run a lot smoother if you have the correct documentation on file for your employees. This means that you need every employee to complete a Form W-4 that documents filing status and records their personal allowances. It includes everything from pen-and-paper records to using an Excel spreadsheet template .
So, when you manage payroll, you’ll need to decide how often employees will be paid (weekly, bi-weekly, monthly, semi-monthly, etc.) and stick to the schedule. You can take care of getting records under control in the event that Uncle Sam ever comes knocking on your door for an audit. Though unlikely, you’ll need to have wage information available, the taxes you paid and withheld.
Set it and forget it
For example, you’ll want to be sure that pre-tax deductions, like health insurance or flexible spending accounts, are set up before payroll is run. Most companies will use benefit administration systems to keep all of the data and deductions organized. A payroll management system is software technology designed to make running payroll easier for businesses. It automates many of the most labor-intensive processes, such as calculations, deductions and payments, and in some cases, includes tax reporting services and compliance support. Many providers today offer payroll management as a standalone product or as part of a larger suite of integrated HR capabilities. Small business owners can pay and manage their teams with integrated payroll, and access HR, health benefits, centerpoint fund accounting and more.
Learning to manage payroll on your own requires paying attention to the legal and tax requirements involved. We’ll break down the process and important considerations to keep in mind. Running payroll for the first time is a momentous event for any small business owner. Not just symbolically, but because calculating payroll taxes is complicated and the legal implications of making a mistake can be steep.
It can mean wading into a world of payroll terms and tax obligations you may be getting familiar with for the first time. From learning acronyms like FICA and FUTA to wrapping your head around withholding taxes, some employers may feel a little uneasy when getting started. Outsourcing payroll will help free up time to focus on your company.