Do you want to find a way to simplify your payroll? Millions of business owners opt to do payroll themselves. That means they’re spending hours on payroll processing rather than doing revenue-generating activities.
Those opportunity costs could be huge for those businesses. If you’re one of those business owners, you need to learn how to process payroll in a way that’s fast and efficient.
Here are the top tips that let you process payroll.
One of the reasons why it takes so long to process payroll is because you’re not prepared or organized. It helps to know that you can take steps to improve your efficiency.
Start by gathering all of the relevant documents. That includes your employees’ W-4 forms and work hours.
You also want to have a set time and day when you do payroll. It makes the most sense to handle payroll every other week or on the first and third Thursdays of the month.
Your employees will be able to depend on a regular income, and you don’t have to take too much time to do payroll on a weekly basis.
You’ll need to tell your employees how to report their hours and when they need to be turned into you. The next step is to work with your bank to make sure the funds are deposited into their account the next day.
Understand Payroll Laws
Payroll laws are complicated because there are so many agencies involved. The IRS is there to make sure you pay payroll taxes and withhold the right amount of taxes.
The Department of Labor ensures you are paying your employees the right amount and follow all labor laws. There are also authorities in your state that have similar functions but operate under state law, not federal law.
As a small business owner, the landscape can be very confusing.
The only way to protect yourself and your business from these agencies is to know the law, follow the law, and keep great records to prove you follow the law.
You’ll want to use a pay stub maker that will do the tax calculations for you and gives you and your employees’ records of their pay. It also saves time and energy because you don’t have to do the tax calculations for each employee.
Withhold the Right Amount
The one common mistake that both business owners and employees make is that they don’t have enough tax withheld from their income.
You want to work with your employees to make sure they opt to have the right amount withheld. It could turn into a huge tax bill for them if they don’t take the right steps now.
Encourage them to use the IRS tax withholding calculator and then adjust their withholding.
How to Process Payroll
Payroll is a necessary part of business, but it’s also a big headache. It’s complicated and it takes up a lot of time.
If you want to know how to process payroll efficiently, you need to have a system that works. You also need to know the laws and keep great records.
Be sure to come back to this site often for more great tips.