Looking to do payroll for your business? What are some key things you need to ask yourself? You’ve taken the big leap and hired that first employee and now what??
Here are 10 things you need to know about payroll:
1. Understand the difference between subcontractors and employees. Here is some great information from the IRS.gov website
2. Know that there can be local taxes you may have to withhold from your employees. Make sure to check with your city government if you are unsure.
3. State taxes are just a part of having employees. Check with your State Department of Revenue and Secretary of State to see understand about your state tax responsibilities including state withholding and state unemployment.
4. There are various Federal tax components involved when hiring employees such as Social Security, Medicare, Federal Unemployment and Federal Withholding. Check out more information here.
5. The monies you withhold from your employees need to be remitted to the appropriate agencies on a set schedule. Failure to remit these timely can land you in a heap of trouble with penalties, asset seizures or worse.
6. There can be pretax and after tax deductions so it is important you have a good understanding of what falls in each category.
7. Timekeeping and record keeping are important aspects that require diligent processes and monitoring to ensure that accurate information is provided for processing payroll.
8. Utilize a computerized system like QuickBooks to help you with the processing or outsource it to your accountant or a company specializing in payroll.
9. Set up an EFTPS account so that you can remit your Federal withholdings and FUTA. This can be done here.
10. If you are going to offer employee benefits that will be withheld from your employee’s payroll ensure you know the laws and the proper set up. Different types of withholdings may include insurance, 401(k) – Traditional or Roth, AFLAC, and more. Check with your team of professionals to ensure you know how to set them up properly.
Payroll for your business has many facets and it is important for you to have a good understanding when you take the leap to hire employees of all that is involved. You may opt to do it inhouse or outsource it. Regardless, it is important for you as an owner or manager to have a good understanding to ensure that it is being handled properly.