Below we’ve laid out the key steps for setting up and managing Payroll for your small business. First, before you do anything make it a priority to remain organized or you will create a lot of unnecessary work for yourself. Managing and setting up payroll online for your small business involves understanding the various and complex payroll rules and regulations.
Employer ID – Form SS4 for Payroll
So, you need to have an EIN, also known as your Employer ID Number before you have any employees. The IRS can impose strict penalties if you have employees without an EIN, so make sure you obtain that. The EIN is also known as Form SS-4 is including in many payroll software programs.
Your State and local government likely has required Business ID numbers you also need to obtain for various tax purposes. This info can be found on your local government websites or this can be retrieved online through your bookkeeping system, whether it’s Quickbooks or another accounting program.
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Make sure you process your employee paperwork and records, as your employees must fill out their withholding Form W4 and return it to you in order for you to withhold the right amount of Federal tax from their income. You will also need to correctly withhold employees social security, medicare taxes and unemployment when managing and setting up payroll online for your small business.
You must choose a pay period for your employees, whether it’s weekly, bi- monthly or monthly. Sometimes certain states will determine this, often States require bi-monthly. The IRS makes you withhold income tax for the entire time period even if the employee doesn’t work the entire period.
Quickbooks Online small business payroll includes all the necessary to tools to ensure you file your payroll taxes correctly and on time. Whether you have one employee or 100, setting up an efficient payroll system will keep in you in compliance with various payroll rules and regulations Federal, State and local penalties.
Additional Payroll Deductions
As your setting your employee payroll, determine how you are going to manage PTO (paid time off), tracking employee hrs, and possible employee overtime pay. Also, don’t forget you need to set up and deduct amounts for health care plans and retirement accts, typically 401Ks and other deferred compensation.
Next, you will have to decide on a payroll system that best suites your needs. Lots of small business payroll companies out there like Quickbooks offer online payroll trial periods so you may want to check that out.