A DIY Guide on How to Do Payroll Successfully
As a business owner, one of the administrative tasks that you need to know how to handle is the preparation of the payroll. If you have a team of workers, it is necessary that you do payroll every month. Payroll preparation is not usually a headache for well-established businesses since they can afford to outsource the services from the experts. Since you cannot afford to outsource payroll services, you should cut on cost by learning how you can do it yourself. Handling payroll every month can be a headache, but if you know a few tips, you will not have to worry about hiring an expert to do it. Nonetheless, the DIY approach is required if you can make error-free paychecks to avoid issues with your employees. Below, you will learn a few tips on how you can prepare your business payroll yourself.
The first step to doing payroll is having your employees complete W-4 forms. W-4 forms are for employees, while W-9 forms are for independent contractors. The purpose of W-4 forms is to act as a record of allowances. Indicating the allowances will help your employees pay less in payroll taxes. As a business entity, you need to inform the IRS and Federal government about your existence and tax-compliance by getting an Employer Identification Number (EIN). In this site, you will read more info. regarding the steps for getting an EIN for your business. EIN is usually considered as the social security number of the business.
The next crucial step is doing payroll is having a payment plan. This should come after getting all the tax information and EIN. Based on your objectives and goals, you can pick a suitable schedule for your business. Once you settle for a payment date, you should strike to get the money ready on the date. If possible, you can consider discussing with your employees about the payment schedule. Most employers are afraid to do their payroll themselves because of the stage that involves the calculation of gross pay and deductions. This is the step that most employers make costly mistakes. Luckily, there are online tools that you can use to calculate both gross pay and deductions for your employees. On this site, you will discover more about the ways of doing gross pay and deductions calculations.
The last step is filing tax forms. In every payment period, the employer is required to withhold part of the pay as tax. Filling tax forms will ensure that you don’t get into problems with the IRS. Delaying in remitting and filing tax forms usually attract huge fines; hence you should do it on time. Therefore, if you are wondering how to do your payroll yourself, you should start employing these useful tips now.
Citation: use this link