As a small business owner, doing payroll for your employees may be something you dread. Who has the time to come up with a whole payment system, right?
Especially when your small business is in the middle of growing exponentially, a payroll system will help you ensure you reward your staff on time and consistently. These are several methods to help you with how to do payroll for a small business.
1. Apply For An Employer Identification Number (EIN)
An EIN is a unique number that is assigned to your business so that you can be identified by the IRS. To apply for an EIN, all you need to do is fill in the application on the IRS website. An EIN is also free to acquire.
2. Ask Your Employees To Fill In Form W-4
Form W-4 is useful for you to track the income taxes that will be levied on your employees’ wages. By calculating this amount, you can withhold that much from their incomes to pay taxes.
3. Decide On A Payroll Schedule
The next step is to decide on a payroll schedule. You will need to have a consistent payroll system, both for your own tracking purposes and to ensure your employees are happy.
Doing payroll as a small business can threaten to get ahead of you at times. For instance, maybe you don’t have enough finances to pay everyone weekly. This is something you should consider when deciding on a payroll schedule.
When settling on a schedule, make sure it’s something you can commit to. If you’ve realized that paying someone once every week is not feasible, you can settle for a biweekly payment or a monthly one.
4. Calculate And Withhold Taxes
The next step is to ensure that you’ve calculated their taxes (with the help of their W-4 forms) and that you are withholding the correct amount. To make this process go more smoothly and accurately, you can settle your payrolls with a payroll check template, where you can go over the amount you will have to pay for taxes for every single employee.
5. How To Do Payroll For A Small Business? – Make Sure You Pay On Time
A payroll schedule will help with ensuring that you are always prepared to pay your employees when you need to, but make sure to set aside some time to settle all the different payroll procedures. This way, when it comes time to roll out payroll, you’re all prepared and will not have to delay the process for any reason.
Feeling Like A Payroll Pro?
Now that you know how to do payroll for a small business you can see that doing payroll as a small business may be challenging, but it is essential to see your workers properly compensated for the efforts. The above small business payroll tips will ensure that the process goes as smoothly as possible for you. The most important thing to remember is that you should settle on a system that you know will work for you.
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