Payroll preparation is a crucial administrative task that every small business owner should know how to handle. If you have a team of workers, it is necessary that you do payroll every month. It is common for well-established businesses and companies to opt for the services of the experts when it comes to payroll preparation; hence it is not a headache to the management. If you want to cut on your business expenses to maximize profits, you should learn how to do payroll yourself. Handling payroll every month can be a headache, but if you know a few tips, you will not have to worry about hiring an expert to do it. Nonetheless, the DIY approach is required if you can make error-free paychecks to avoid issues with your employees. The article herein is a step-by-step guide on how to prepare payroll yourself.
A crucial step to take when doing payroll yourself is getting your employees to fill W-4 forms. W-4 forms are for employees, while W-9 forms are for independent contractors. In the W-4 forms, your employees will get to include all their allowances. This way, they will get to pay less in payroll taxes. As a business owner, you will need to have EIN to inform the Feds and IRS about the existence of your business. In this site, you will read more info. regarding the steps for getting an EIN for your business. EIN is usually considered as the social security number of the business.
The next step is making a payment schedule that is suitable for your business. Once you have EIN and tax information documents, it is time that you pick the most appropriate day to pay your employees. The decision regarding the payment schedule for your business should be influenced by what you are aiming for. Ensure that you have the money ready on the payment date that you choose. Besides, you should get the ideas of different employees when choosing a payroll schedule. The part of doing payroll that gives most employers headache is the calculation of gross pay and deductions. It is the stage that you are likely to make a mistake when preparing your payroll. Luckily, there are online tools that you can use to calculate both gross pay and deductions for your employees. On this site, you will discover more about the ways of doing gross pay and deductions calculations.
The process of preparing payroll is completed by filing tax forms. The IRS requires every employer to withhold the right tax amount from every employee’s pay. You will not have to worry about issues with the IRS if you file all the tax forms. Delaying in remitting and filing tax forms usually attract huge fines; hence you should do it on time. As a business owner, if you want to do payroll yourself, you should follow these steps from now!