A New Business Owner’s Guide to Setting Up Payroll

Have you avoided hiring help because you dread setting up payroll? Don’t keep your business on hold any longer.

Small business payroll shouldn’t cause you stress. Instead, it should be something you look forward to since it’s a sign of growth.

Read on to learn how to get payroll up and running.

Consider Your Budget

Before setting up payroll, you should consider your business budget. Think about how much you can afford to spend on your payroll and if it would make sense to hire an employee or outsource payroll to a company.

You also need to consider the cost of payroll software. If you hire a company to handle payroll, ask if they will cover the cost of the software or if that will fall on you.

Every business will want to set up payroll differently. But outsourced payroll can save you a lot of time and money.

Research Payroll Services

When setting up payroll for small business, you may want to look into payroll services. A lot of small businesses can’t afford to hire a ton of full-time employees, so outsourcing is more cost-effective.

However, you still need to do your research on who you plan to hire for the service. Then, you can make sure that the company will send payroll on time to you and your team.

For example, the website for payrollserviceaustralia.com.au covers how the company works. It also includes software for payroll management.

Determine a Schedule

Next, you need to figure out when and how often you plan to pay people. A lot of companies pay in a few ways, including:

• Biweekly
• Twice a month
• Once a month

Biweekly payments go out on the same day, while twice a month payments go out on the same date. If those schedules don’t work for you, you might choose to pay every week.

Categorize Your Employees

Another essential step in how to set up payroll is to categorize your employees correctly. If you have traditional employees, you need to classify them as such so that your company will withhold taxes and pay certain taxes for having those employees.

On the other hand, if you work with independent contractors, you will want to categorize them that way. Then, you can pay them what you owe them, and you don’t have to pay employment taxes or other taxes.

Gather Tax Forms

Before you add people to your payroll system, you need to gather the correct tax forms. If you have any traditional employees, they will need to fill out a W-4 form and return it to you.

Contractors and freelancers should fill out a W-9 form. Even though you won’t withhold taxes, you may need to report those payments to the IRS.

Setting Up Payroll Doesn’t Have to Be Hard

Setting up payroll can be overwhelming, but you need to do it correctly. That way, you can make sure to pay employees on time, and you can keep your business legal.

Whether you choose to hire a payroll service or an employee to manage the books, consider the steps involved. That way, you won’t miss any essential details.

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