Pay day is one of the most important days in an employee’s life. This is because it gives the employees a sense of satisfaction that the blood, sweat, and tears that they have given up for the sake of their work has finally paid off—literally! As an employer, it is your duty to ensure that your employees’ salary gets to them on time. Getting their salaries on time boosts their morale which ends up improving their motivation to do their job. It is also highly important that pay and taxes are calculated in an accurate manner. No matter how minimal errors in calculation may be, you do not want to upset employees. There are benefits of outsourcing payroll but there are also a couple of benefits to doing payroll on your own. One of these benefits is the fact that you can save a couple of dollars by calculating and processing your own payroll.
If you think you have ample amount of knowledge regarding calculating payroll, you can definitely make use of Excel or any other similar applications that can help you come up with your very own payroll spreadsheets and worksheets, and be able to calculate your company payroll in an organized manner without the need to shell out money for software and outsourced accountants.
With that being said, we would like to give you a couple of guidelines to help you come up with your very own payroll spreadsheet. We have also uploaded a couple of free payroll templates and samples that can make the creation of your company payroll worksheet easier than ever. Now the big question: Are you ready to explore and learn more about payroll? We promise to share more information with you if you also promise to continue reading this article. Let’s do this!
The elements of a payroll are not that complicated. In fact, there are only a couple of things that are included in it. The basics are the names of your employees, the hourly wage, the deductions such as taxes, and other specific data that is specific to the employee. The gross pay of an employee is also reflected in the payroll as well as their net pay or take home pay.
What are the common terms that you will find in a payroll?
With the wide variety of payroll software available on the Internet, a lot of business owners tend to turn to these as they are more convenient. By feeding the software with the updated employee timesheet calculator and by customizing the software according to the company’s preferences, it can automatically compute the company payroll. However, we know that there are those business owners who still want to do things manually and be hands-on with their employee’s payroll. This may not be applicable to all businesses but to some, this is what works best for them. While doing it manually may be a time-consuming task, you are sure to be in total control of everything and you are aware of the pay. Should there be discrepancies, you can also readily show the employee how you went about the computation of the pay.
One of the best tools for doing manual payroll would be through Excel or similar spreadsheet applications that is readily available on your laptop or computer. With Excel, you can create a simple yet functioning payroll template that can automatically compute taxes and other deductions. The employee payroll template that you would be creating can be something that you can use over and over again for every pay period of the company. Best thing about this method? The tools you need are free!
You think creating payroll spreadsheets are complicated? Think again! Coming up with your very own employee payroll is actually easier than you think. Want to know what these simple tips are? Check it all out here.
More often than not, the laptop you bought will have Microsoft Excel readily installed in it. However, if you have bought a laptop with no operating system or if your laptop does not come with a free licensed version of Excel, you can still definitely make use of freeware such as OpenOffice or LibreOffice. Once you have Excel or an application similar to Excel, it is time for you to open a new spreadsheet. The new spreadsheet will serve as the base of your template.
You will notice that a spreadsheet comes with cells that are assigned to certain letters and numbers. Make sure that you start with labels. You may wonder what labels you would need to include in a payroll template. Here’s some of the most common ones:
The names of the columns can be customized according to your preference. Some of the most common customizing would include
How you want the labels to look like all depend on your preference.
Excel or other spreadsheet applications are great for their features that help to automatically calculate data. To do this, you can easily assign a mathematical formula to a specific cell or an entire column. This means that when you make any change, the cells will automatically make updates.
For payroll, here are a couple of formula examples that you can use in order to make calculation of pay a breeze and the labels or cells that do not need any special formula.
Note that the formulas can be dragged downward. This means that there is no need for you to manually enter the formulas one by one. You can find out more about preparing payroll in Excel by reading up on our article regarding Creating Payroll in Excel Using Simple Tips.
What we have shared above are just some of the most important steps to set up your small business payroll solution. Now that you have set up the basics, it is now time for you to customize the payroll and make it look unique. What you can do is to bold titles, align titles to the center, make other sections have different font sizes or font styles. Play around with font styles and cell colors until you find a look that works for you and your company. Save it and name it in a file name that you would make it easy for you to search for it.
Ensure that the data in your spreadsheet are update. Double-check the formulas you have entered and make sure that when updates regarding pay are made, such as an increase or any additional deductions, should be included in the payroll.
Excel spreadsheet templates may not look as fancy as the ones included in a software but it is definitely convenient and is also a cost-effective means of calculating payroll. With its drag features, you can also make sure that you are able to save time and you will also be able to lessen the hassle.
One more way of being able to save time? Checking out the printable payroll templates that is included in this very article. They are pre-filled with formulas and labels. All you need to do is to edit or customize it according to the needs of your company. Once you have set up everything, you are good to go! All you need to do now is to input all the necessary information for the specific pay period and for sure, the pay f your employees will be automatically computed.
Processing payroll taxes can be quite a chore. You have to first figure out how much you will need to pay your new hire. After that, you will have to check out a tax table in order to cumpute the taxes that you would need to deduct from the gross pay.
In order to do this, we would like to give you a step-by-step guide on how to do payroll taxes and process payroll yourself. You may still want to consult a payroll expert if you want to make sure that you are doing everything right.
Federal taxes, state taxes, and local taxes all fall under taxes that can be deducted from an employee’s pay. It also includes Social Security fees, medical insurance, and income taxes. Knowing the current tax rates is also important if you want to make sure that you are able to properly and accurately compute for the taxes of your employees. You can take a look at payroll tax basics by reading up on Payroll Tax Basics for Small Business.
Processing payroll on your own can be a bit time-consuming and you may also find that errors are quote inevitable when it comes to doing payroll on your own. However, if you have taxes covered and you feel like you have a good grasp of processing taxes, you will surely find that the DIY payroll processing may be the one for you. Just make sure that you are confident enough to do it on your own before you start to dive in to the adventure of doing the payroll on your own.
To get you started, here’s what you need to do:
You can gain more information about taxes and other payroll tips by checking out our article entitled Payroll Tips from a Tax Professional.
You can make use of whatever application is available on your computer such as text editor applications, but making use of spreadsheet applications will be more convenient because of the capacity of spreadsheets to accurately calculate and tally up totals. You can also edit texts in spreadsheets just the same way in a text editor.
You can also easily input formulas and calculations in a spreadsheets that would make quick calculations that would make it easier for you to know how much you owe your employees. You may think that payroll will just involve addition and subtraction but it does involve a whole lot more than that.
Sometimes, things work out in ways that you do not imagine it to. Sometimes, you think you need to outsource an accountant in order to come up with an organized company payroll. But sometimes, rethinking what your company actually needs can be a huge step that can help you save on money. This is when Excel payroll spreadsheets come in handy. You have to consider that there are a couple of risks involved when it comes to doing your very own payroll, but you have to be always ready. While a payroll software can take care of all of these things with just a couple of clicks, being hands on with the accounting of employee salary can help you answer some questions regarding any discrepancies in a better manner as you know the whole process. Payroll is important and can even help you understand the regulations and taxes even more.
Worried that you might not make it to the deadline of your pay period? You may want to check out How to Pay Employees When You Can’t Make Payroll. Pay is important, which is why you should take responsibility even if you are going to be late with it.