Businesses spend nearly 5 hours each pay period working on the payroll in the United States.
These hours include calculations, filing, and paying taxes to ensure that everything is accurate.
If you are a business owner and want to improve your payroll skills, there are a variety of things to do.
Continue reading to discover the best steps for managing payroll so that you can focus on other areas of business!
Create a Payroll Process
The first step in managing payroll is to create a system for your business.
You must first identify your payment schedule for your business. Many businesses pay on a biweekly or weekly schedule. Next, you will have to consider the types of employees that you are eating with. Do you have full-time or part-time employees?
At this point, you should also be identifying the types of b benefits that your employees are eligible for. The most important thing to do in this step is to identify how your taxes get completed.
Receive Employee Paperwork & Paystubs
After you have developed a business payroll system you must ensure that all new staff fills out new hire forms.
New hire forms often include the Federal and State W-4, I-9, and direct deposit. This information is crucial when filing taxes and conducting payroll. Once you have received all of the documents you will need to get timesheets.
Timesheets can get completed online or with a piece of paper. Every timesheet should get reviewed and approved for accuracy. A paystub maker can help make this step simpler for your business!
Calculate Payroll for the Pay Period
After discovering how many hours an employee has worked and their hourly rate, you can begin doing calculations.
The gross pay will need to be calculated first, this is done by multiplying the hours that they worked by their hourly pay. Payroll deductions and taxes will then need to be taken out of the gross pay. Deductions include Social Security, unemployment tax, and health insurance.
There may be certain deductions that your staff has, while your other staff doesn’t. This is why paperwork is crucial to identify who gets what.
Pay Your Staff & Taxes
The calculations should be complete and reviewed by yourself and another person to check for accuracy.
Once you have confirmed all of the numbers, it is time to pay your staff via direct deposit or check. You should inform your staff that errors can happen and they should always check for accuracy. This will help ensure that they are getting paid what they should.
After you have paid your staff, you will need to make payments towards employment taxes. Taxes typically have set due dates that you will need to learn about.
Create Reports & Save Documents
Each year you will have to work on reports that summarize your yearly payment spending.
These reports are often sent in for tax purposes. By completing your reports, your employees will receive their W-2 forms. You will also have to save and store all of your documents. Most people recommend keeping documents on employees and payroll for at least 7 years.
Managing Payroll the Easy Way
If you want to increase payroll efficiency without the hassle, this guide can help.
Managing payroll is a simple task if you get yourself in an organized routine. Although there is a lot of paperwork and calculations to handle, you can get through the task easily.
Don’t forget to consider taxes and deductions when you are dealing with payments, this is often where issues arise.
Be sure to check out our blog for more articles about small business practices and how to improve payroll!