Ensuring your employees are paid fully and correctly is rule 101 of business. Fail to do this and you run the risk of unrest, low morale and walkouts. In the past calculating and filing your business’ payroll by yourself would have been a risky exercise, with just one instance of human error potentially causing problems with employees or the IRS.
Thankfully nowadays with modern payroll systems, the risk has been substantially reduced. However, there are things that any business owner needs to be aware of when deciding to take on payroll themselves.
Invest in a Full-service Payroll System
Let’s not make things harder than they have to be. A lot of the busy work which could result in errors has been eliminated in 2020 thanks to modern payroll systems. This tech can help you handle your payroll taxes, filings, understand expenditure and can help prevent fraud when processing checks and payments.
Most of these services run on software available online and therefore there are no hefty downloads to be completed. Sign up can be completed quickly, meaning you can get started whenever you’re ready to do so.
Make sure your Employees are Signed up Correctly
Once your system is all set up, it’s time to make sure you have uploaded all the information needed in order to make sure payments are carried out as expected. Names, address, social security numbers and tax information are all necessary.
It’s also worth ensuring all employees have completed Form W-4, this makes sure that you can withhold the correct federal income tax from their pay.
You may also need to sign up for an Employer Identification Number if you don’t have one already. This is used by the IRS to identify your business correctly when it comes to tax purposes.
Law requires all US businesses to keep track of employee wages and hours worked for up to two years. This can differ state to state, with some requiring employers to hold onto records of a longer time period. Depending on where you’re set-up, it’s worth double-checking the specifics of your state.
Payroll software can help with this task, with many including time tracking functionality alongside other features.
Keep Track of Tax Payments
Yet more records to keep a hold of I’m afraid! The IRS requires tax documentation to be held by a business for three years. Again, there are varying timelines depending on your location, so again it’s worth double-checking your states specific laws.
This is another task in which modern payroll software can save filing cabinets worth of space. Many systems keep copies of tax filings in their own specific section, making them easy to access whenever called upon.
By following these steps as a guide and conducting a more specific investigation, you should be able to start processing your employees’ payroll yourself successfully, without having to rely on an accountant!