If you are planning on opening a new business, setting up your company’s payroll can be rather overwhelming. Thankfully, there are many nearby payroll processing companies that can do this for you. However, before you hire someone to run the payroll for your company, it is important to understand the basic steps involved in setting up payroll. Listed below are a few tips you must be aware of when setting up payroll.
Register for an Employer Identification Number – This is the very first step in setting up a new company. An employer identification number helps in identifying a business entity. This is quite simple and straightforward. You can apply for the EIN via fax, telephone, mail, or by just getting on to the website of the IRS.
Understand Your State & Federal Tax Laws – This may sound like a daunting task to many. Tax laws are forever changing, and violating them can lead to hefty fines. It is important for you to know and understand all the tax laws of your state as well as the federal tax laws so that you hold back only the right amount from the pay checks of your employees.
Stay On Top of Your Business’s Paperwork – Each time you hire a new employee, you must be sure to have them provide you their W-4. This form is used for those employees who opt to withhold their status. Being their employer, you need to have this form so that you can deduct the right taxes from their paychecks. Remember, at the end of each year, you must check with your employees to see if there have been any changes made to their W-4. This is crucial as you will be using the information you get from their W-4 to file their W-2 forms so that your employees can go on to file federal income tax.
Choose a Suitable Payroll Schedule – This is yet another important consideration for you to make as an employee. There are 4 kinds of schedules you can choose from – weekly, bi-weekly, semi-monthly, or monthly. Based on which schedule you choose, there may be certain regulations that you will have to adhere to. For instance, the payroll schedule requirements tend to vary from one state to another and you may not get to choose the schedule you prefer.
Mark Important Due Dates – Aside from paying each of your employees the right amount, running pay roll also involves paying taxes. Based on the kind of business you run, you may need to pay taxes quarterly, semi-annually, or annually. Missing these dates can lead to penalties and fines. It is important for you to map out your due dates so you never miss a deadline.
Whether you are a new company, or are adding new employees to the mix, it is important for you to be up to date with your payroll. Enlist the services of nearby reputed payroll processing company such as Virtual Jeannie Bookkeeping Services Inc. Call us at (707) 664-1425 today.