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We get it. Payroll can be a daunting task if you’re not sure where to begin. It’s vital for any business to know how to do payroll so they can properly pay employees. This is why we’ve compiled this guide to help you make sure your payroll is successful.
Collecting Employee Information
Before you get started with entering and processing any salary information, the first step in knowing how to do payroll is making sure you’ve collected all necessary employee information.
You will need to know your employee’s social security number, full name, address, and their bank deposit information if you’re doing direct payments. You will need this information to match their W2 and W4 forms at the end of the year.
Understanding Payroll Calculations
It should be a given that the employees you pay aren’t getting the full salary or hourly amount paid directly to them. Payrolls have certain calculations that are added and subtracted from their totals. You will need to make sure your employees aren’t requesting any additional deductions from their pay.
Determine if you are including vacation and statutory holiday pay, along with if employees have worked overtime. Generally, when it comes to paying stat pay and overtime pay, the proper amount is time and a half of what the employee is normally paid.
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Confirm Payroll Deductions
Payroll deductions are the next most important thing that you will need to know for how to do payroll. You will need to properly deduct federal and state taxes from the employees’ pay, as well as pay the employer contribution as a business. You will also be responsible for withholding tax, family/medical leave, and workers’ compensation in some states.
If you’re not sure what those amounts are, it’s a good idea to get payroll help from an accountant to make sure you are processing the proper deductions. This will save you having a surprise bill owing money to the government each quarter and anger from employees come tax season if they are owing more than usually.
Don’t Skip the Twice-Over!
The best payroll tip we can offer you is to never process payroll without giving it the once-over, twice! Payroll errors are easy to make and are costly mistakes for your business. The easiest way to avoid that is to double-check your work before submitting. Review employee information, salary/hourly amounts, and deductions to confirm they are correct.
Finally, once you’ve finished entering all the info you’re ready for the final step! The last thing on your payroll to-do list is handing out employee paystubs. If you’re not sure how to get those done, don’t worry. You can get a payroll check template online and fill it in yourself to distribute.
You’re All Set!
Now that you’ve followed our simple how to do payroll guide, you should be able to confidently process your own upcoming business payroll without any hiccups. Remember, when unsure about any calculations reach out to an accountant for help. Like what you’ve read? Check out the rest of our site for more content!
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