Process & Procedure Guide: Payroll For Small Businesses 2021
Business is mighty and so it is daunting too. The most crucial phase for any small business owner is to calculate the payroll. Quite a challenging task of its own, it can become a bit troublesome for the small business in the long run to handle the payrolls for employees. As a business owner, your expertise exists as an entrepreneur – leave the labor and tax laws to the accountants and professional bookkeepers. Once you have hired corporate payroll services a reliable payroll system can be installed to ensure a proper record of the processes and procedures.
Whether you lead with the left foot or right one, you need to take both to make things work so if you think you can survive without using a proper payroll system or payroll services then you have another thing coming.
How Outsourced Payroll For Small Businesses Are Helpful?
A professional payroll for small businesses provider is responsible to take the financial matters into their hands to assure a proper follow-up. Whether it’s the payments, salaries, or certain expenses everything is managed by the professionals.
1. By Applying Employer Identification Number (EIN)
A unique number assigned to the business (for IRS purpose) is known as EIN.
This number represents your business and identifies it when it’s time to report the employee information to the government. The total income and taxes paid on your behalf, all the information related to it is included in it.
An EIN can be referred to as a Form SS-4 or a Tax ID – both are the same. The professional accountant will apply for the EIN, on your behalf, directly to the IRS. The best possible way is to apply through an online application.
2. Additional EIN Requirements
Each state will have different regulations that you might miss otherwise. Payroll for small businesses remains up-to-date with the states and localities.
Did you know: Some states require separate numbers for tax purposes?
Your expertise is not in tax laws which is why these services will take care of such a payroll scenario too. For instance, New York, Massachusetts, and South Carolina require separate numbers for tax.
To keep up with the additional EIN requirements, the professional accountant will determine the city/state regulations by visiting the state’s small business website the right way.
3. Able to differentiate Between Independent Contractor and Employee
In case you are taking the services of an independent contractor or have properly hired employees, it will affect your income and taxes.
The accountant understands the impact between the two (independent contractor and employee) has on the small business. When taking care of the payrolls at the end of the month/year or at the time of taxes accountant will come down to three basic factors;
- A worker is an employee if the employer controls the when, where and how work is done.
- A worker is an employee if the employer provides the necessary work tools to complete the tasks.
- A worker is an employee if benefits are given to him/her like health insurance, paid time off, and so on.
Now according to these basic scenarios, the accountant will guide you accordingly or discuss matters in further detail.
4. Take Care Of Employee Forms
Small businesses are often reclined to hire payroll outsourcing services for better management of the financial department. So the first thing they do is to make sure to get the documents in order at the time of hiring the employee.
The required tax and payroll information is collected within the first week of employment. So, the accountant can ensure the employee receives their first paycheck on time.
But before the employee is given their paychecks, the accountant will hand out the Federal Income Tax Withholding Form W-4 to the employees.
Each employee is eligible to fill these forms. This allows the accountant to calculate the correct tax withholding. Later, they also must fill the I-9 form too to verify that they are legal workers in the US.
5. Select The Pay Period
Another role of the payroll for small businesses is to take care care of the allotted pay period. The less interval between each pay period is better to maintain the schedules. Let’s say a weekly or bi-weekly pay period is preferable for small businesses.
In case you want to make pay the employee on an hourly basis (which makes it less than a week) then consult the accountant and then he will contact the State Department of Labor to confirm whether the idea is workable or not.
6. Use of Payroll System
Even the best professional bookkeepers and accountants have to use software to make sure that all processes are completed timely. Using CPA Software is one of the most common ways to accomplish the goal.
This will help the accountant to track the employee for deductions, benefits, or other taxes, and so on. This is one of the foremost reasons for hiring payroll for small businesses so that the owner does not have to deal with everything.
Time To Initiate The Payroll With My Count Solutions
One thing is clear – there’s only so much a small business can do on its own. To keep the employees productive, monitor them, and take care of the financial aspects it’s time to get help from payroll outsourcing services.
My Counts Solution is the perfect solution for your payroll, taxes, and all other financial problems. Using the latest online tools the experts can produce the payroll within no time at all.
Consider joining hands with My Counts Solution. All you need is one click to stay on the top of the game.