As a small business owner, there are many different hats that you are expected to wear. Many people don’t realize the amount of work that goes into running a successful business. One thing that you have to be on top of is payroll. When you’re first getting started, this can seem like an insurmountable task. However, when you take a closer look at each step, you might feel differently. Propel Your Accounting is here to talk about the steps that are required to set up payroll for a small business.
How to Start Payroll for a Small Business?
If you break down the payroll process into steps, you will see that it is doable. Here are the steps that you need to take:
– Employer Identification Number: You can get a free employer identification number (EIN) from the IRS when you apply for one. This will allow the IRS to identify your company. It is a quick and painless process.
– State Business Requirements: It is also required that you get a state ID number if your state requires you to pay state income taxes. There are nine states that don’t require state income taxes to be paid, so it’s important that you are aware of your state’s requirements.
– Independent Contractors & Employees: Sometimes, it can be hard to determine whether or not the people that are working for you are independent contractors or employees. Luckily, the IRS has a guide that can be helpful in helping you determine which one the people working for you fall under.
– Schedule: Another thing that needs to be done is determining the payroll schedule that works for your business. You can do this by taking a close look at the cash flow of your business. You can choose from the following options, weekly, biweekly, semimonthly, or monthly. Most people choose to pay employees biweekly, but you need to do what is best for your company.
– Employee Policies: It is also important that your employees have a clear understanding of your policies. This is usually best done with a handbook of some kind. You can clearly state policies regarding things like time off, overtime and other subjects such as these.
– Choosing the Right Payroll System: Small business owners also need to think about the right payroll system for them. It can be hard to let go of this part of your business and turn it over to someone that can professionally help you get it done. However, it can be helpful to have someone to help you navigate the process.
– Paperwork: The last thing on the list is to ensure your employees and yourself, has filled out the correct paperwork.
Bookkeeping, Accounting, Business Consulting & HR / Admin Services in the United States of America
If you are overwhelmed with payroll and all that it entails, you can turn to Propel Your Accounting to take care of it for you. We will ensure it’s done right. Call us today!
