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It’s good to see your business grow and gain traction in the market. But part of this growth involves hiring your first employees permanently. And then you need to think about running payroll processing.
If you’re doing this for the first time, it can be confusing, tedious, and boring. But your employees need the payment for their work; hence, you can’t avoid doing it. To help you out, here’s a guide on how to do payroll for a small business.
Register as an Employer
Before you start processing your business payroll, you need to register to get an Employer Identification Number (EIN). This number works the same way as Social Security Number (SSN). It’s unique to your business and will be used for small business identification services.
You need this number before filing for a license, file taxes, and open a bank account. You don’t have to worry about finances because getting the EIN is easy and free of charge. You only need to go to the IRS website and apply for it directly.
Learn the Laws of How to Do Payroll for a Small Business
There are various federal laws safeguarding employers’ and employees’ rights. Even if you’re using an automated payroll service that already incorporates all the pay and tax laws, you still need to learn some yourself.
Understand how often you should run payroll. Learn how and what information you need to provide concerning your employees. Go through all the laws at the federal, state, and local levels concerning payroll for businesses.
Always make sure you comply with the law that provides the most benefits to the employees. Take your time to learn more about employee rights. Finding out about all the legal issues regarding small business payroll protects your business from unwarranted lawsuits.
Have Your Pay Schedule
How often you pay is also an important consideration when doing your payroll. Check with the state labor laws about the frequency of payment and adhere to it. Common schedules include monthly, weekly, or bi-weekly.
Salary status is how you’re going to compute the wages. You can choose to pay hourly rates or a one-time salary. What you decide on salary status will depend on your business’s individual needs and your employees’ position.
Consider Hiring a Payroll Manager
Sometimes it’s not easy to run your payroll and still deal with other aspects of your business. In this case, a payroll manager comes in handy to help with payroll processing, especially for a business that’s growing so rapidly. Working with a professional payroll manager makes everything easy and more efficient.
Make Your Payroll Processing Easy
Paying your employees the right way doesn’t have to be hard if you take your time to learn how to do payroll for a small business. Following this guide will make your payroll processing easier and more accurate. If you don’t have the time, consider hiring an accountant to do the work for you.
If you’ve never dealt with payroll processing before, take your time to learn more about it on this site. You can also find plenty of helpful information about running your business.