Understanding the Basics of Payroll
If youâ€™re the owner of a small business, the odds are good that the following statement is familiar: You couldnâ€™t do your job without your employees, but sometimes dealing with your employees can feel like a job.
Rarely is this more accurate than in the world of payroll.Â Referring to the steps and processes involved in compensating workers for their services, payroll is about a lot more than cutting a check.Â A leader in small business accounting, Accurants works with businesses of all sizes to meet their complete accounting needs. Here are some of the basics of payroll compiled from our many years of experience:
Deciding When to Pay
As a business owner, you need to decide when to pay your staff members for their services. While twice monthly pay schedules are probably the most popular, some employers opt to pay once a week or every 30 days.Â Whatever option you choose, make sure to stick to it â€“ after all, your employees need to know that they can count on you to pay your bills, so they can pay theirs.
Life would be easier if SMB owners only had to pay employees their wages.Â Unfortunately, businesses must also collect federal and state income taxes, as well as Social Security and Medicare.Â Your employeesâ€™ W-4 forms tell you how much to deduct based on their salaries and other factors, so make sure these documents are completed and up to date.Â You can check with your state government to determine specific income tax requirements for your area.
Whether you pay your employees a set salary or compensate them based on hours worked, you likely want to track their time to measure productivity and performance, among other factors.Â As a business owner, you need to determine whether workers are exempt or non-exempt, as this classification likely affects overtime requirements.Â You can also visit the Wage and Hour Division of the Department of Labor for details on your time tracking requirements as a small business operator.
Of course, salary isnâ€™t the only means by which businesses compensate their workers.Â Many companies also provide benefits in the form of medical and dental care, life insurance, 401ks, and even childcare.Â In some cases, you will need to deduct a portion of an employeeâ€™s salary each pay period for his or her healthcare deductible.
Additionally, businesses may offer paid time off in the form of sick days, vacation, and personal leave.Â Based on the number of workers you employ, the U.S. government may require you to offer certain benefits to your employees.Â Do your research to avoid getting hit with fines and other penalties for failing to offer the necessary benefits.
To summarize, if you have employees then payroll is a must have.Â Since the calculations behind all the taxes & deductions are complicated and the laws and limits/rates do change frequently, keeping up with them is a big challenge.Â Whether you as a business owner do the payroll calculations on yourÂ ownÂ or take help from expert payroll services or use a software, whatever choice you take, we strongly recommend using expert help & take benefit of software packages.
Contact Accurants Today
You donâ€™t necessarily need an accountant on staff to run your small business â€“ but you might need one inside your computer.Â A complete small business accounting solution, Accurants fulfills a wide range of needs, helping you with everything from time tracking to invoicing and even tax preparation.Â We are working on adding Payroll module by the end of this, which when released will complete the whole circle of our offering – a complete small business management solution.Â You will no longer need multiple best of the breed systems to manage your business, Accurants will empower you to run your entire business.Â To learn more about our services, register to try Accurants free for 30 days. We look forward to revolutionizing your accounting experience in the coming months.