Being new in the business world can be a bit complicated, but didn’t all businesses struggle when they were starting out? One of the struggles you might be having is probably figuring out the payroll for your employees. Processing payroll can be quite a challenge especially if you are a new business. You can make use of payroll software or hire an internal or external accountant. However, doing so can be quite costly especially if you are just starting out. You want to invest your money in other things that can help you while you are starting out. You can save a big chunk of money if you do your employee’s payroll.
While there may be benefits of outsourcing payroll, there are also benefits to doing payroll yourself. We are sure that you are facing a lot of challenges at the moment and we just want to make it a little less troubling for you. So we want to share a few things with you regarding doing payroll taxes and processing the payroll yourself. We want to share a few pointers with you as well as a few tips and guidelines that can definitely help you out. Keep reading to find out more about processing payroll on your own.
Doing Payroll Taxes Yourself
Payroll taxes are the deductions in an employee’s salary that is composed of federal, state, and local taxes. There is also income tax, Social Security, and health taxes. In calculating employees taxes, you need to know what the current tax rate is of the state where your business is located. Tax percentages are changed on a yearly basis so you have to make sure that every tool you are using to compute the payroll. One good tool that you can use is the net pay calculator templates that you can find on our website. These are pre-filled with formulas and labels that you can update should there be changes in payroll calculations.
Processing Payroll On Your Own
Here’s the thing about processing payroll on your own: it can be less costly but can be prone to a few errors. We cannot promise that errors will be avoided but we can help you lessen these errors. If you consistently have errors in your employee’s payroll, you might encounter problems with your employees filing complaints against you. So we are here to make processing payroll a little less complicated for you. To get you started with processing the payroll on your own, check out the following:
Have Your Employees Fill Out a W-4 Form
A W-4 form is needed to be filled by employees in order to ensure that they will get paid and that their personal allowances and taxes are closely monitored. This means that the more the allowances of an employee is, the lesser taxes are taken out of the employee’s pay. Take note that every single time you hire a new employee, each employee should file a W-4 form and file a new hire report.
Find or Sign Up for an EIN
An EIN or Employee Identification Number is needed in order for you to process payroll yourself. This is used by the IRS to identify that you are a legal business entity.
Choose a Payroll Schedule
There are three important dates that you need to make a schedule of in processing payroll: employee pay dates, tax payment due dates, and tax filing deadlines. Make sure you mark these on your calendars to make sure that you are able to process these way before the date arrives.
Payroll tax calculator templates to download are available on the website to ensure that you are able to calculate each of your employees’ taxes accurately. By using the calculator we have, you will be able to give a reliable paycheck to your employee. You will be able to keep track of the portion of the taxes you pay for the employee and how much you are taking out from the employee’s pay.
Pay the Taxes
Pay the appropriate amount of taxes during the deadline you have set. This will help to avoid garnering any late fees and other unwanted fees.
Fill Out Tax Forms and Employee W-2 Forms
Make sure that your federal tax return is filed and sent accordingly as well as the other returns applicable to your business. Prepare annual filings as well the W-2s at the end of the year.
What we have just shared with you are just payroll tax basics for small business and are also just some of the things that can help you sort out employee payroll. However, by following these steps we have provided, we are sure that you will be able to process the payroll of your employees in a constructed manner. You should also take note that you should take payroll tips from a tax professional to see what returns are applicable to you and what are the requirements that your business might need.
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