As a small business owner, processing payroll can be overwhelming; especially if it’s the first time you’ve ever done it. There are so many things to learn, from new software to various payroll processes. You may even come across some terms you’ve never heard of before! This blog will help you navigate payroll processing in 2018, whether you choose to do it yourself or outsource it to a payroll company or Professional Employer Organization (PEO).
First, make sure you know and understand your responsibilities. Payroll is complex and isn’t just as simple as writing a paycheck. You have to pay your employees correctly, and that includes adhering to federal wage and hour laws in addition to the regulations in your state. With payroll also comes payroll tax and a host of related forms. You want to make sure to pay the taxes on time and file related forms properly.
Choose the Payroll System That’s Right for Your Company
There are many ways to process payroll. You can choose to do it yourself with or without payroll software. The benefit of using payroll software is that it can create paychecks instantly. You could choose to outsource it to a payroll company. In that case, the payroll company will take care of paying your taxes, but there is still plenty of room for error. If you choose to have a PEO handle your payroll, you will not only have paychecks, direct deposits, and overtime calculations taken care of, you will be relieved of the burden of filing payroll taxes and the related forms.
Pay Employees Properly
When it comes to paying employees, it’s important you classify them correctly as either exempt or non-exempt. Non-exempt employees primarily perform work that is subject to overtime laws. It’s also vital that you maintain the necessary employee documentation. You’ll need completed I-9s to verify each employee’s identity and eligibility to work in the U.S. Also, make sure each employee fills out a W-4 form to specify his or her tax withholdings. If you’re going at it alone with payroll processing, make sure you reserve your employees’ taxes and garnishments for things like child support or back taxes correctly.
Pay Taxes and File Federal and State-Mandated Forms
There are both quarterly and annual reports to keep track of when filing payroll taxes. If you’re not using a PEO, you’ll need to report the earnings and tax withholdings of each employee to the IRS every quarter. You’ll also report employees' total withholding amounts annually. You must deposit taxes in full to an authorized bank or financial institution.
If you choose to partner with a PEO like FrankCrum, you’ll have a dedicated payroll coordinator to work with you during each payroll cycle and a team of experts to handle complex payroll issues and tax obligations. Contact us to learn more about FrankCrum’s payroll services.