If you own a small business, at some point you’ll likely hire new employees to grow your business. It’s a great milestone, but it also presents the unique challenge of actually getting started with payroll. Researching and finding a payroll service, learning the ins-and-outs of paying employees, and knowing the intricacies of each very important step can be complicated and confusing.
If you’re a business owner, your best bet is to take the plunge and hire a professional payroll provider. There are many online services out there, but choosing which one is best for you and managing it yourself could lead you into a sticky situation if you’re not clear on the steps below. The good news – we’re here to help.
If you’re a business with 50 or fewer employees, you can benefit both financially and in terms of time savings when you outsource your Payroll and HR needs. When you bundle these together, you’ll only have one report to approve and one invoice to pay. By partnering with a professional payroll provider, they can work with you to get you set up the right way from the start.
What you need to know and do in order to set up payroll:
Are you an employer or a trustee?
You need to know your title. An employer pays salaries and provides taxable benefits to employees, whereas a trustee authorizes payments and/or deals with another person’s property, business, or income.
You much understand your deductions – which taxes are subject to pretax withholding and how this withholding will affect the actual deductions.
You must have a Federal ID Number (EIN). Ensure you have obtained a Federal ID number as you will need to supply this when filing your paperwork. You’ll also need:
- Your full name as it appears on your income tax return
- Your social security number
- Your phone number
- And all details about your business.
Get yourself organized! Ensure all necessary payroll information is in order including:
- Business Information: Name, Address, Mailing Address, Number of Employees
- The date your employees will receive their first check
- The months included in the payroll and the frequency with which you will pay employees – monthly, bi-monthly, weekly, etc.
- If your business is a franchise – you’ll need the name of the franchisor and location of head office
- If foreign-owned, the country of the business affiliate
Business Registration – You’ll need to ensure you’ve filed with the Secretary of State and have your registration information available.
As a business owner, you have many other things to worry about rather than dealing with the time consuming process of payroll. Outsourcing your payroll services to a professional provider will ensure your employees are always paid promptly and accurately.