Originally Posted On: https://blog.expressnews.com/lifestyle/2021/10/16/4-helpful-payroll-management-tips/
One of the most difficult parts of owning a business is payroll management and taxes. Withholding the wrong amount for taxes, making data-entry mistakes, overtime calculations, and correct employee classifications are almost always the most difficult parts of payroll.
Even though the process itself is fairly straightforward and simple, it’s tedious and repetitive. Small business payroll doesn’t mean small volume. If you have even a handful of employees, you’re looking at hours of work on a monthly or bi-monthly basis.
What are the best payroll management tips you can use as a small business owner? Keep reading to find out.1. Get Employee Data and Keep It Updated
Making a custom spreadsheet is not going to get you where you want to go accurately or quickly. The best options are outsourcing your payroll or using payroll management software. If you want to know why you can click here for more information about that.
Either way you go, you need to get your employee data figured out and recorded. Not only that, you need to have periodic checks that that information is up to date.2. Calculate Gross Pay Before Net Pay
It’s always best to calculate gross pay for non-exempt and hourly workers first. Find the hours, multiply it by their hourly rate, and voila, you’re finished. Salaried workers are even simpler since all you need to do is divide the annual salary by the number of pay periods you have.
Once your gross pay is finished, net pay (take-home pay) needs to get calculated out. Make sure to deduct the appropriate pretax contributions and retirement plans from the gross pay totals. FICA (Federal Insurance Contribution Act), federal and state income taxes, and local taxes all need to get accounted for next.
Post-tax deductions come next for wage garnishments, post-tax benefits, and post-tax retirement plans.3. Offer a Variety of Payment Methods
These days you have a long list of ways to pay your employees. Some exotic methods of payment even include blockchain currencies.
Though, more institutional, conservative, and predictable means of payment are generally electronic payments or physical checks You can pay with direct deposit or even a paycard.
A paycard is a convenient way to pay employees quickly and securely. Paycards are reloadable cards that are sometimes even connected to financial apps. It helps your employees to intelligently track their spending, set aside money, get cash from ATMs within a network, and even link the card to a payment app like Google Pay, Apple Pay, or Samsung Pay among others.4. Be On Time
Businesses must report taxes they withhold and pay to state and to federal governments. They have to do this annually or even quarterly. This depends on your business’s tax liabilities and your state regulations.
However, it isn’t only taxes that need to be on time. You must pay your employees in a timely manner, but also government agencies and benefit providers. Taxes, garnishments, benefits, and more must be paid out along with your contributions on time.
These payouts go to insurance carriers, creditors enforcing a garnishment, and of course government offices.Payroll Management Tips for the Small Business Owner
No matter your scale, payroll management should be a top priority for you, every pay period. Following these tips help you keep your sanity (and your hairline). We can’t take away the volume of work, but this helps you better manage your work to operate in a fast-paced world.
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