Becoming a small business owner is one of life’s biggest accomplishments. Business ownership isn’t just coming up with a viable idea and filing articles of incorporation, though. Over time, your business will grow, which means you’ll need to take on employees to help you keep things going.
Having employees means that you’ll have to spend time paying employees. Getting that done properly might seem like a daunting task, but it’s actually fairly simple! Read on to learn all about employee payroll!
Get the Paperwork Done Right Away
If you’ve worked for a business in the past, then you know that there’s more that goes into what you take home than your hourly rate. When you onboard a new employee, it’s important to take care of all of the relevant administrative matters before you get them settled in.
At a minimum, your new employee needs to fill out an IRS W-4 form so you know how much tax to withhold from their paycheck. You’ll also want your employee to fill out any applicable state and local withholding forms. Finally, you’ll want them to bring in proof of identity and fill out an I-9 form.
Calculate Employee Pay
Employee payroll processes include calculating the number of hours your employees worked, if they’re hourly, which results in the gross pay. From there, you’ll deduct things like taxes, Social Security (FICA), and any deductions for things like benefits in which the employee also contributes.
Once deductions are taken out of the gross pay, you’ll be left with what is termed net pay. Net pay is how much money actually gets paid out to the employee during each pay period.
If your employee is asking for payment early, it’s important to note that you aren’t under any obligation to do that. There are certain programs in which your employee can enroll that’ll help them get paid a little early. Click here to learn about one of those options.
Generate a Pay Stub
You can’t just hand a paycheck to your employees on payday and consider your work done. Paying employees also means that you need to use a paystub generator to give them a pay stub that shows every step you took to arrive at the net pay. There needs to be a line item for gross pay and every single deduction, and it also needs to include a “year to date” amount for each line item.
Consider Payroll Automation
This article is a broad overview of the intricate payroll process. Depending on the number of employees you have, paying them can be quite time-consuming.
If you want to save time and reduce the likelihood of errors, consider opting for a payroll automation system. This system takes the work you do by hand and does it all automatically, making the payroll process much smoother. It’s a great way to redirect your focus from administrative tasks to more important ones.
Paying Employees Doesn’t Have to Be Complicated
Unless you operate a charitable organization, you will have to pay employees for their labor. Thankfully, paying employees is a fairly simple process once you get the hang of it. If you really want to maximize your efficiency when it comes to employee payroll, then consider payroll automation services!
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