Did you know that one-quarter of small business owners spend six or more hours on payroll taxes each month? That’s a fair amount of time you could be spending on other vital tasks.
Managing small business payroll processing doesn’t need to be time-consuming though. Use these seven tips to make it easier starting today.
1. Make Decisions about How to do Payroll
Before you hire an employee, you should make some decisions about how you’ll conduct payroll.
This includes deciding how to pay your employees and how often you’ll pay them. Will you have salaried employees, or will they be paid an hourly wage? Will you pay them every week or every two weeks?
Think about how much time you’ll spend tracking hours, calculating payroll taxes, and writing checks.
2. Pick the Right Small Business Payroll Processing System
Next on your payroll setup checklist is choosing systems to support your activities.
First, decide on a timekeeping system. How will you track hours for your employees? You’ll need to record time off and overtime as well.
You’ll also want to choose a payroll system. The right system will help you calculate your employees’ checks, taxes, and more.
3. Prepare to File Paperwork
If you’re learning how to prepare payroll, one thing that might surprise you is how much paperwork there is.
There’s more to it than calculating how much you need to pay your employees. You also need to hold back taxes and remit those withholdings. You have to prepare tax forms, such as W2s, and file W4s for all new employees.
In short, you’ll be doing plenty of paperwork during every payroll processing period.
4. Automate Withholding
If you chose the right payroll processing service, you should be able to automate calculations. This can save plenty of time, especially when it comes to calculating state and federal taxes.
You should also keep in mind any voluntary withholding. This can include deductions for pension plans or other benefits you might offer.
5. Look to Your Record Keeping
One of the challenges of small business payroll is keeping records. Maintaining good records is mandatory for businesses.
Be sure to check that you’re compliant with both federal and state laws. Depending on where your business is located, you may have different requirements. The records you need to keep may also depend on the industry you’re in.
6. Stay up to Date
Another challenge of payroll processing is ensuring everything is up to date. Take the time to review your employees’ records. Have their addresses changed?
You may need to collect updated tax forms from time to time. You should also keep track of raises and benefits.
You’ll also want to stay up to date with the latest best practices in payroll. Monitoring the legal framework is also a good idea. Keep an eye on taxes as well, since the rates can change annually.
A great resource to use is the blog at https://www.paystubcreator.net/. The experts there write about the latest tax changes and provide great insights.
7. Create a Budget
Create a budget for processing payroll in your small business, even if you handle it yourself. This will help you track costs and the time you spend administering payroll.
It also allows you to re-evaluate the costs and explore new solutions.
Make Payroll Easier Now
Small business payroll processing can be time-intensive. It doesn’t need to be difficult. With the right tools and advice, you can make payroll easier than ever.
If you’re looking for more great business advice, check out our blog. We have plenty of tips to help you keep your business growing.