If you own a small business and have employees, you know how important it is to manage payroll effectively. Your employees are dependent on you to give them the pay they deserve on time. At the same time, you must make sure you deduct Social Security and Medicare taxes and pay federal and state income tax on behalf of your employees. Managing payroll on your own can be stressful. Here are some tips to help you manage your payroll for your small business.
Set Up a Payroll Calendar
A calendar is a great way for you and your employees to keep track of the payment schedule. It also tells your employees when time cards are due and when they will get paid. The easiest way to make a calendar is to use a payroll app or an online calendar. When putting together your payroll calendar, it would help to follow certain guidelines. For instance, use a regular calendar to identify dates that may slow down processing, such as holidays. Also, use different colors to note deadlines and other key information.
Register for an Employee Identification Number
As a business owner, you are required to have an employee identification number (EIN) before putting any employees on the payroll. Your EIN allows you to identify your small business for tax purposes. Registering for an EIN will assist in more areas than payroll. The majority of small business owners need to get an EIN before applying for licenses, filing payroll taxes, or opening a bank account.
Follow all Wage Laws
Your business must comply with all federal and state laws. Failing to do so can result in heavy fines or even jail time. This means you need to be able to understand your financial and legal responsibilities as an employer. Ensure that you are paying the correct employment taxes and federal taxes, such as Social Security and Medicare, the proper local and state tax, and the right income tax for each employee. Regularly check your payroll schedule to ensure that every employee gets paid accurately and on time.
Save all Documents
When setting up payroll, it would be best to document the entire process. This will help you identify any areas of improvement and find the system that works best for your business. Keeping accurate records will save you time in the long run. With accurate records, it is easy to identify mistakes and correct them as quickly as possible. Record each step for filing tax reports and payroll registers. It is also a good idea to have instructions on processing payroll manually in case of an emergency.
Contact Bowman & Company Today
Bowman & Company CPA, PC provides all of our individual and small business customers with experienced, accurate, and affordable financial services. Our financial services aim at decreasing your taxes and increasing your net worth through responsible, timely, and accurate recordkeeping. We offer our services to clients throughout the Washington, D.C. metropolitan area including Maryland and Baltimore County, Columbia, and Howard County. For more information on our offerings, contact us online or call us at (410) 381-8121. You can also find us on Twitter, Linkedin, Facebook, and Youtube.