How to Do Payroll: 5 Tips for Doing Payroll Yourself

how to do payroll yourself

How can you handle payroll in a way that’s quick and easy?

About 40% of small business owners tackle payroll alone. As anyone can attest, that can take time and resources away from the business. Learning how to do payroll can be time-consuming and costly, especially if you make a mistake.

How can you make payroll fast and efficient? Keep reading to find out.

1. Schedule Time to Do Payroll

Payroll takes time to do. It can take all day, depending on the number of employees you have. You’ll need to schedule this time in advance.

Make sure that your schedule is blocked off during this time. You don’t want to be interrupted and make a mistake on payroll.

2. Gather Employee Information in Advance

Before you start payroll, you need to make sure that you have your employees’ information. You want to make sure you have everyone’s W-4 forms. You should have them upon hiring new employees. The W-4 tells you the number of allowances the employee takes so you can withhold the right amount of taxes.

Next, you need to make sure that you have your timesheets from everyone. Some companies have this information online, while others use a paper-based system.

3. Do You Have an EIN Number?

You need to make sure that you have an EIN number or an employer identification number. This is like a social security number for your business.

You need to go to the IRS and request one for your business. It only takes a few minutes to fill out the online form and get your number.

4. Know Tax Laws

Taxes are complicated. The amount of taxes that you need to withhold depend on the amount of income earned and the number of allowances an employee withholds. If you have an employee that is subject to wage garnishments, that makes the process much more complicated.

There are standard taxes that apply to everyone, regardless of income. That’s for social security and Medicare. Employees pay 6.2% in social security if they make less than $128,700.

Medicare taxes amount to 1.45% of income. Employers are responsible for matching those percentages.

Once you figure out federal taxes, you have to calculate state and local taxes.

5. You Can Always Outsource

Tax laws are so complicated, that you want to throw your hands up and give up. The good news is that you can always outsource to payroll services.

They can handle the taxes and payroll issues for you. That allows you to focus on your business.

How to Do Payroll Quickly and Easily

Learning how to do payroll isn’t easy. It takes time to learn the tax laws and your legal obligations.

The fastest and easiest way to do payroll is to outsource it. You can save time, money, and know that payroll is being done right. You don’t have to worry about making costly tax mistakes when you do payroll.

Want more business tips? Head over to the Sales section of the blog to learn how to close sales and increase your revenue.

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