As an employer, an often time-consuming and stressful endeavor is organizing employee payroll. It's a task that must get done, though, despite how busy you may be. Make this process as stress-free as possible by using these payroll tips.
Gather Necessary Information
Before you can begin managing employee payroll, you must first gather all of the necessary information and register different accounts. You'll need employee identification numbers, state tax accounts, workers' compensation coverage, and personal information from employees.
Each of your employees, before working, should have filled out a W-4 form. This worksheet allows employees to claim allowances that determine how much federal income tax withholding you take out every year. State withholding forms may also be required, depending on where your business is located.
Keeping this information organized is simple if you invest in the right accounting software.
Determine How Employees Get Paid
Employees today can be paid hoursly or with a salary. Both have their advantages from an employee payroll standpoint. For example, managing employee salaries is a little easier because you don't have to calculate as many figures. There is just one lump sum of money for each employee to keep track of, based on a manageable salary that you can afford.
Conversely, if you decide to pay employees hourly, you'll have to decide how many hours your employees worked each month. It's easier to lose track of these figures, so you might consider investing in some financial software. Choose a user-friendly program that keeps track of employees' time and compensation amount.
Use a Professional Service
You may not have a lot of time on your hands to complete employee payroll, or you may worry about making a mistake along the way. In either case, you can always use a professional service. It handles all payroll and tax responsibilities, so you can just focus on running your business.
Important documents are organized and there are plenty of helpful tools you can use to assist with this process. For example, there are employee tabs that let you quickly enter pay rates and schedules for employees. A lot of these services also provide an error-detection feature. So if a figure is dramatically different from other pay periods, you'll be notified immediately.
Dealing with employee payroll may not be at the top of your to-do list. You no longer have to dread it if you organize important information and use the right tools.Share