When you’re managing a business, employee payrolls can be the one thing that keeps you up at night. It’s estimated that approximately 49% of workers will look for a new job after two paycheck problems.
It’s further estimated that approximately 82 million Americans, or 54% of the workforce, experience payroll problems. When one employee has an issue, it could put your entire business in jeopardy.
Start using these three tips for a painless payroll run and you’ll never have a payroll problem again.
- Collect Paperwork for Employee Payrolls
The biggest mistake you’ll ever make with your employee payroll is not having the right paperwork. Taxes, of course, are an issue, but incorrect paperwork could delay an entire payroll run.
The first thing you need to do is get an Employer Identification Number (EIN). You can apply for your EIN online in a very simple application.
You will need to have a valid SSN or Taxpayer Identification Number to apply for this. Your EIN is a nine-digit number the IRS uses to identify your business for tax-paying purposes.
In addition to the EIN paperwork, you need to have a new W-4 form filled out for every employee.
You also need to fill out W-2s for every employee that receives more than $600 annually. This needs to be filled out every year at tax time.
- Hire Professionals
The most common places you’re going to make mistakes in your employee payroll will be in your paperwork and taxes. If you’re running payroll on your own, you need to know every local, state, and federal tax law.
Sound like a headache? This is why professionals are in business—to help keep that federal tax economy flowing like the great American river that it is.
There are a number of options. Hiring a bookkeeper or accountant to manage everything is a very common method that many companies use today.
But you can also run employee payroll yourself with an online check stub maker. These are often simple and easy-to-run online portals that do a lot of those calculations for you.
Online check stub makers are also more affordable solutions for smaller businesses that aren’t using their own bookkeeper or accountant.
- Know Your Dates
After you decide how often and when your employees are getting paid, the other important dates that you need to know are the taxman dates. Uncle Sam wants his portion of what you’re withholding from paychecks for federal or local taxes.
If you don’t know how often you have to pay taxes, now is the time to learn. You’ll have to do so at least once or twice a year, and for some businesses, even more.
Your business could be fined or experience penalties if you don’t pay Uncle Sam on time. Map this out before you begin your first payroll and have those dates inked on your calendar.
Hire someone if this is an area that confuses you. The only dates more important than the dates your people get paid are the ones you pay the taxman.
Invest in Payroll Solutions
Every payroll that you manage works in concert with the American economy. When Americans are working and getting paid, everybody in the country wins.
The IRS Data Book for 2017 reveals that in that year, the treasury received $3.42 trillion, and $2.39 trillion of that was payroll taxes. That means that 70% of federal income comes from your employees and others all over America.
Making mistakes on your employee payrolls or in any area of your business will cost you and buy you a few more sleepless nights. Discover how online payroll solutions can save your business money today.
If you’d like to read more interesting articles about business finances, then please check out our other posts.