Our streamlined payroll services for small business helps you overcome obstacles & lead to more efficient payroll management of a small business. We ensure that all compliances meet when you pay your employees & reduce the risk of any tax error.
Hire Payroll Services or Do Payroll for Your Small Business Yourself?
If you own a small business, handing payroll might be one of the toughest and most time-consuming tasks you might have to do. One small mistake and you could land yourself a costly fine from the IRS, which could be a huge blow to your business.
You either consider hiring payroll services for small businesses or do it by yourself if you’re confident enough. Just follow the steps mentioned below carefully if you want to do your payroll yourself.
How To Do Payroll For A Small Business
Usually, in today’s time, Company owners use automated accounting software to manage payroll for the business. Besides using the application, Make sure you follow these steps carefully to avoid any errors.
1. Get an EIN (Employer Identification Number)
The EIN is a unique ID that is used by the IRS to track your payroll for tax purposes. Getting an EIN is easy and free on the IRS website and only takes a few minutes. All you have to do is follow the steps mentioned on the IRS website by the EIN virtual assistant.
2. Create a payroll schedule
The payroll schedule basically implies how often your employees get paid. This schedule affects the way you calculate the income tax. Depending on the state you are in, the local laws mandate a minimum frequency for paying employees. You also need to factor in administration costs and needs as well as employee preferences.
3. Get Your Employees to fill the W-4 Form
Employees in every company need to fill out the W-4 form issued by the IRS. It basically tells you how much amount from the employee’s paycheck needs to be withheld as income tax. This amount depends on the income, number of dependents, marital status, etc. of the employee. In case any employee needs help filling up the form, they can go to the IRS website and use the tax withholding estimator.
4. Calculate Net and Gross Pay
This is important math that you need to be careful with. This calculation will decide how much amount will be paid to the employee after all the deductions like benefits, taxes, etc. The gross pay is calculated before the deductions, and it will be worked out differently for hourly, weekly, and monthly workers. The net pay is calculated after the deductions and appears on the paycheck.
5. Pay the Employees
You need to pay your employees on designated days according to the payroll schedule you have established. The payment can be done through paper checks, direct deposit, or other methods. Additionally, most states require you to give pay stubs to employees that state all the deductions.
6. Pay taxes
The amount that was withheld from the paychecks of the employees as taxes need to be paid along with the amount the employer owns for Social Security and Medicare along with Federal Unemployment Taxes. You can get other information and pay these taxes online through the EFTPS (Electronic Federal Tax Payment System) which can be found on the specific website of the state you are in.
7. Report Taxes
This is the last step in the payroll process. The tax payments need to be reported to the IRS via Form 940 and 941. You could either file them electronically or print and mail them to the IRS.
If you follow all the above steps properly, you should be able to manage your company’s payroll just right.
Why You Should Get Payroll Services For Small Business
The payroll process can be quite complicated for the untrained, and doing it manually if you’ve not done it before might lead to costly mistakes. Also, there are many nuances, exceptions, and caveats during the process that you might not be aware of.
If you want to concentrate on your business and have a hassle-free experience with payroll, you should get professional payroll services for small businesses. Such services take care of all your payroll needs.
A good payroll service provider like QABuffs will ensure full assistance and fast turnaround while streamlining all your payroll processes. They will ensure that all the legal statutory and compliance requirements are met while doing the payroll for error-free reports and documentation. The experts at QABuffs will handle everything from creating payroll to filing and reporting the payroll taxes with complete accuracy.