7 Tips To Get Your Payroll Started

Author: Hologram Financial Solutions LLC | | Categories: Accountants , Accounting Firm , Accounting Services , Bank Reconciliation , Bookkeepers , Bookkeeping Services , Financial Reporting , Outsourced Accounting , Payroll Services , Small Business Accountant , Small Business Accounting , Small Business Bookkeeper , Small Business Bookkeeping , Small Business Services

1. BUDGET, BUDGET, BUDGET!

Before you start running payroll and hiring full-time employees create a budget to see if you can even afford to have employees and pay them what they need. This is the most important step in getting payroll started as overpaying employees is one of the biggest causes of a business to go under. A general rule of thumb is you should be paying from 15- 30% of your gross revenue. This includes costs for wages, taxes, and benefits. If you need to create a budget for payroll contact Hologram Financial Solutions and we will help out.

2. How will your employees get paid?

Make sure you have a direct deposit authorization form so employees will be able to get paid electronically vs a paper check

3. Decide on the frequency you would like to pay your employees?

There are several different frequencies you can choose from:

Weekly, bi-weekly, semi-monthly, and monthly

See what option would be best for you as an overall business,

I always recommend either bi-weekly or semi-monthly just give your business some cushion between payroll processes.

4. Setup the withholding and unemployment tax accounts that you will need.

Withholding -

You will need to have a withholding account setup for each state that you have a working employee living in

Ex: You have two employees both of the work in DC, but one of them lives in DC and the other lives in MD

You will need to setup a withholding tax account in the state of MD and with the District of Columbia.

Unemployment -

You will need to have an unemployment account for every working state that you have. Meaning, if you have remote workers or more than one location that has employees working there, you will need to setup an unemployment account with that state.

Ex: You have just hired a new remote worker in Connecticut; however, your main operation location is in MD you will need to register your business with the State of Connecticut and apply for an unemployment account in Connecticut account.

*Remember that unemployment rates change every year so make sure you keep your turnover to a minimum.

5. Automate your payroll tax payments.

This is especially important if you are the type of person that is always extremely busy, because this is one thing that if you forget to pay you will pay a large sum of money in penalties and interest.

6. Will you be offering benefits?

Many employers offer benefits such as health insurance and retirement planning. Decide on what benefits you would like to offer, but keep in mind that if you have full-time employees you must offer health insurance according to the law. Consult with an insurance broker to get more information for health insurance enrollment and an accountant to provide you guidance on retirement planning.

7. Will you offer paid-time off, if so, how will it be accrued

Employers now are starting to offer paid time off as vacation and sick leave. To compete with all businesses to there I would highly recommend that you do so for your full-time employees. PTO (paid time off) can be accrued a few different ways, you can have time accrue at a lump sum at any given time of the year, like on beginning of year or anniversary date, based on number of hours worked on a payroll process, or certain number of hours each payroll process.



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