Are you wondering if you can do payroll for your small business on your own? This doesn’t have to be a difficult task if you learn how to do so correctly. While doing your own payroll is more affordable, it can also open your payroll up to more mistakes.
To learn more about how to do payroll for a small business, keep reading. In this guide, we will introduce you to some of the steps you will need to take in order to do payroll properly.
Make Sure All of Your Employees Have Completed a W-4 Form
Employees need to fill out a W-4 form in order to get paid. This allows individuals the ability to track their personal finances while documenting their filing status.
The more allowances an employee has, the fewer payroll taxes will be taken from their pay each period. An employer needs to file a new hire report every time a new staff member is hired.
Sign Up for EIN
You will need to sign up for an EIN, or an Employer Identification Number, or find your EIN if you’ve already signed up before you begin doing payroll yourself. This number is used by the IRS to identify employers and businesses. Some states require that you also get a state EIN, so check your state’s employer requirements to see if you will need both numbers.
Set Up a Payroll Schedule
Before setting up a payroll schedule, you will want to make sure you are insured and that you have workers’ compensation. You will also want to put workplace posters on display.
Then, you can add three dates to your calendar. These dates will be employee paydays, tax filing deadlines, and due dates for your tax payments.
When you sit down to pay your employees, you will have to figure out what federal and state taxes you will need to withhold from your employees. You can do so using the IRS withholding calculator or a reliable payroll calculator while also using your state’s resources. You will need to keep track of both your own portion of taxes as an employer as well as employee taxes as you do so.
After you have calculated taxes and withheld income taxes, you can then pay your payroll taxes. You will need to submit your state, federal, and local tax deposits, typically on a monthly basis. You will then need to file your payroll documents, including your employee’s W2 and your tax forms.
You will need to send in your employer’s federal tax return, which tends to be on a quarterly basis as well as any local or state returns that may be required of you.
Are you looking for assistance when it comes to doing payroll for your business? Learn more about your options here.
How to Do Payroll for a Small Business
If you are trying to cut costs by doing payroll on your own, keep this guide on how to do payroll for a small business in mind.
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