Share:

Payroll is one of the most frustrating, challenging, and time-consuming chores of running your own business, even for experienced entrepreneurs. Not only does it involve issuing paychecks, but dealing with taxes. Here is a general look at the steps involved and why you should consider hiring a payroll service to take the pressure off your hands. 

4 Steps to Handling Payroll

1. Apply for an EIN

Every company with at least one employee must have an Employer Identification Number, which is like a social security number for businesses. You can apply for an EIN online through the IRS, however, make sure you have all of the relevant information nearby since you cannot log-out of your session without starting over again

2. Figure Out Your Tax Ratespayroll service

As an employer, you’ll have to pay both state and federal payroll taxes on a regular basis, including subtracting Social Security and Medicare from your employees’ paychecks. You will need to calculate the amount of these taxes based on the information your staff supplied on their W-4 forms. These calculations can be extremely complex, which is why so many business owners prefer to let a payroll service handle the tax compliance.

3. Issue Paychecks

Once you’ve calculated your employees’ earnings and deducted their tax obligations, you have to disburse their payments. These days, most employees expect paychecks to be directly deposited into their accounts, so be sure you know how to send electronic payments.

4. Keep Detailed Records

You will need to keep accurate details about the number of hours your employees worked, both to reimburse non-exempt workers for their overtime and to account for days off. After doing all the tax work outlined in step 2, you will also need to supply your staff with tax documentation for their own records at the end of every year.

 

For over 15 years, Joe Heard, CPA has provided reliable, high-quality payroll services to businesses throughout Checotah, OK. Whether you’re opening your doors for the first time or already have dozens of employees, he’ll handle all the details so you can focus on running your business. Visit his website for more on tax and payroll services, or call (918) 473-1492 to make an appointment.

tracking