Here’s How Integrated Payroll Services and Time Tracking Can Optimize Your Business 0
Did you know that integrated payroll services and time tracking software can help you improve the efficiency and accuracy of your bookkeeping procedures? At Consultants In-A-Box, we understand how time-consuming and frustrating managing these areas of your business can be -- that’s why we’re here to help!
Since most business owners use separate software for their payroll management, human resources department, and time-tracking, the first step in taking control of these procedures is finding a way to house these things under one roof.
With integrated payroll systems, you don’t have to worry about making costly mistakes that could’ve been avoided with a more efficient process. You’ll have everything you need right in front of you and a majority of your responsibilities are automated.
Why Should We Avoid Manual Time-Tracking?
It doesn’t matter if you’re talking about accounting, bookkeeping, taxes, payroll, or human resources, nothing is more important to the success of these departments than accuracy. Anything that puts this accuracy at risk should be viewed as a weakness and improved upon.
There are so many things that can go wrong when tracking employees’ time manually. There might be a moment when you rush yourself and make a small mathematical mistake. You might forget to track someone’s time one day and have no way of knowing how long they truly worked for -- the same goes for breaks.
If you fail to pay your employee the right amount of money, it can have a damaging effect on your business’ reputation. Your employee makes a complaint, that employee starts to talk to other employees, other employees talk to outside sources. It’s a vicious cycle that could be avoided with a quality time tracking software tailored for your business’ needs.
Integrated Payroll Services & Human Resources
Payroll and human resources go hand-in-hand when operating a business -- no matter the size of that business. With so many different software and platforms available to assist you with your procedures in both of these areas, you have to be careful with which ones you choose.
When you have two pieces of software that don’t cooperate with each other, it doesn’t matter how amazing those two software programs are. You’ll still be vulnerable to costly mistakes, errors, and inaccuracies when operating your business.
Let’s say you have an employee that comes to you with two requests -- they need to change their address and they need to fix their timesheet because they forgot to clock out the day before. With integrated services, all you need to do is make those changes once and you’re done.
Without integrated payroll systems, you’ll need to make those changes in each software program. Furthermore, you’ll open the door to making even more mistakes. As you can imagine, this takes time. And in business, time costs money.
Benefits of Integrating Payroll, HR, & Time Tracking Software
When you can have all your procedures under one roof, it maintains a level of consistency across all departments that improves the efficiency of your business. You’ll limit mistakes and maximize the amount of time these departments have to focus on more important tasks.
The right time tracking software, payroll system, and HR headquarters will help you automatically track hours, pay, taxes, deductions, checks, direct deposit, new hire documents, employee changes, bonuses, overtime, and so much more.
Better yet, these integrated systems can work in a variety of ways to meet your business’ needs -- whether that be a bar code, magnetic stripe, biometric information, or tracking via a computer.
Let’s take a look at some of the major benefits your business receives when integrating the software you use for your payroll and human resources departments.
1. Efficiency is Key
Owning a business requires a never-ending commitment to management. You need to make sure you’re not spending too much on payroll, but also need to make sure you have enough overhead to handle the growing demand of your business.
Integrated systems allow you to keep a tab on all of these things just like you were before, but it adds a level of efficiency that was absent before. Your dashboard will tell you everything you need to know and even help you make projections for the future.
Efficiency is key to a successful business and integrated systems will get you there.
2. Moving Closer to Being Paperless
In today’s digital world, anything designed to help you stay eco-friendly makes your business more appealing to the outside world -- including investors and customers. As the world moves closer to a paperless society, your business should do the same.
Manually managing payroll and human resources tasks requires a lot of paper and a lot of ink. In business terms, that means it requires a lot of money and overhead.
Imagine how much easier it would be to ditch all the paperwork and have everything completed for you automatically. Your employee’s times are automatically tracked and recorded in the software, which is then used to automatically calculate the employee’s pay for any given pay period.
Once the pay period is complete, the checks are automatically written and direct deposits automatically sent. It’ll also be tracked in real-time and give the employee access to payroll records and history -- all without the exchange of paper.
3. Focusing Your Time Elsewhere
When your human resources and payroll departments spend the majority of their time completing tasks manually that should be completed automatically, it takes away from the time they could be spending on more important tasks.
These departments should be focused on finding new and innovative ways to find the right employees and implement the right procedures -- not manually tracking an employee’s hours. When these departments finally get the tools and resources they need to successfully do their job, you’ll be surprised by what they’re capable of.
4. Following Laws, Rules & Regulations
How many times has your company been attacked by the IRS, state governments, local agencies, or even employees due to a failure to comply with laws, rules, and regulations? It’s a common mistake made when running a business, but one that can be avoided nonetheless.
With integrated systems for each department, you’ll effectively receive notifications and alerts when something needs to be attended to. This can include employees that have reached their weekly hour limit or when an employee has entered overtime pay for their shift.
Ensuring you follow rules, laws, regulations, and guidelines when scheduling and compensating your employees is essential. In the event you are audited for something, your integrated systems will have all the documents, data, and records required for a smooth audit.
5. Keeping Employees Happy
When you hire employees, you want them to have a positive experience working for your company. It makes it easier to hire new employees when you have a good reputation and limits the amount of turnover you see on a monthly basis.
One of the keys to keeping your employees happy is a streamlined scheduling and payment process that’s free of errors and easy to access. Being able to easily track vacation time and sick pay, as well as their future schedule, makes it easier for the employee to work their personal life around their work demands.
Business owners can also set up alerts and notifications when an employee is nearing a bonus or an anniversary that might be subject to a pay increase. Being able to automatically track these things takes the guesswork out of payroll and gains trust with your employee when they see these changes made effective immediately.
6. Accessibility & Security
Data entry becomes extremely difficult when you start to introduce several different working parts and destinations before completion. The risk of making mistakes and losing information in the mix is increased without a streamlined process.
Integrated payroll systems limit the number of people entering data and maximize the number of people reviewing information for mistakes. Not only does it help detect mistakes before becoming an issue, but it gives your human resources department more time to focus on improving these procedures for the future.
In addition to that, integrated payroll services allow for better security across all platforms. Since a majority of the information you handle on a day-to-day basis is confidential and sensitive information, it’s imperative you keep it safe from thieves and hackers. You’ll be able to take control of who has authorized access to this information.
Are You Ready for Integrated Payroll Services?
Integrating your payroll and time tracking software with your other human resources software programs is one of the most beneficial things you can do to your business’ operations. It helps improve the efficiency of your HR department, increases the satisfaction of your employees, and gives you the confidence you need when running your business.
Your employees will be able to easily access their information and payroll records. This gives them exactly what they need when dealing with personal matters, as well as limiting the amount of requests your HR department receives.
As a result, it also helps give your HR department more time to focus on tasks that improve procedures and solidify the future of your business. With a majority of their previous responsibilities now automated, they can be more efficient elsewhere.
If you’re tired of seeing outdated procedures and disparate software ruin your company’s reputation, Consultants In-A-Box is ready to help. We can help you take better control of your current HR situation and improve the efficiency of time tracking, payroll, and employee management within your business.
Contact us today to learn more about how we can assist your business.
A Guide to Paying Remote Employees and Contractors 0
Have you ever found yourself scratching your head when paying remote employees? Did anyone ever teach you how to pay an independent contractor properly?
Business owners today are met with a wide range of challenges, but none present a higher risk to your company than your payroll procedures. You need to ensure your payroll process is as efficient and error-free as possible.
Of course, that means understanding the differences between an employee and an independent contractor. Furthermore, you need to understand the different state laws when paying remote employees.
For any new small business owner, this might seem like a lot to learn. While it’s tedious in nature and not the most exciting task you’ll have as a business owner, it’s all the more necessary when keeping your business in good standing -- with customers, employees, the IRS, and the governments.
Luckily, you’ll also have the help of payroll software, which can manage a lot of these state and federal laws for you.
Understanding State Withholding Taxes
When paying remote employees, one of the most common mistakes a business owner makes is assuming you pay state withholding taxes in the state where your business is set up. This is not true.
For the most part, you’re going to be paying state withholding taxes in the state the employee works -- not where you work. That means if your business is set up in Los Angeles, CA and your employee works remotely from Buffalo, New York, then you’ll have to pay state withholding taxes in New York -- for that employee.
You can start to see how this can get messy when you have remote employees working all over the country. It’s also a large reason why most people decide to hire an independent contractor in today’s climate, which leads us to our next point.
Understanding the Two Types of Remote Workers
Remote workers come in two forms these days -- an employee and a contractor. Knowing how to pay contractors properly and paying remote employees correctly are two things every business owner needs to know before hiring anyone.
Let’s take a closer look at each type of remote worker:
- Remote Employee - subject to withholding half of the payroll taxes from their paycheck and paying the other half of payroll taxes yourself.
- Remote Contractor - not subject to any withholding or tax payment because the contractor handles it themselves.
You can see why many businesses today are more attracted to the remote contractors, but that doesn’t mean remote employees don’t come with benefits too.
In fact, each state has different ways of classifying workers, making it your main duty to ensure all workers are classified properly. This is in your best interest and will help you avoid any penalties or fees sent down by the government.
How to Pay Contractors That Work Remotely
When compared to paying remote employees, learning how to pay an independent contractor is far easier and requires less work. This is largely due to not having to pay state withholding taxes, which saves any business owner a massive headache when doing payroll manually.
It should be noted that your business might be subject to paying backup withholding taxes if the remote contractor is working in a non-resident state. This is one of the laws and regulations that varies by state, which is why it’s always important to check each state’s laws when hiring employees.
If you’re paying remote contractors for work they completed, there are generally only two forms of paperwork that need to be managed by the business owner -- the W9 and the Form 1099-MISC.
Let’s take a closer look at each document:
- W-9 - this is a ‘Request for Taxpayer Identification Number and Certification’ and must be filled out before you can pay a remote contractor. It’s what gives you the information needed for the second form we’ll talk about. Backup withholding might be necessary if the wrong identification number is given.
- Form 1099-MISC - this is the form you fill out at the end of the year for tax reasons and must be filled out for any contractor you paid more than $600. It’ll tell the government how much was paid to the contractor so they can keep tabs on all the workers in the United States that owe taxes.
You’ll save a lot of time when doing payroll with independent contractors, but make sure you keep accurate records of both of these forms, as well as any payments made to them, which is essential to maintaining good relationships with the government.
Paying Remote Employees for Their Time
When it comes to hiring and paying remote employees, the level of difficulty is raised. First, you’ll have to determine whether they are an in-state employee or out-of-state employee.
In order to figure that out, you need to understand the difference between the employee’s resident state and non-resident state. The resident state is the state the employee lives in, while the non-resident state is the state the worker commutes to for work but doesn’t live in.
Once you understand the difference, ask yourself two questions:
- Does your remote employee do their work at home or do they have to travel somewhere to complete their work?
- Does your remote employee live in the same state your business is registered or do they live in a different state?
If either of these is unclear, use their W-9 to learn their resident state and don’t be afraid to ask them whether they work from home or not. You’ll want to know this information because you’ll be withholding taxes in the state your employee works, whether that happens to be their resident or non-resident state.
Paying Taxes for In-State Remote Employees
When paying a remote employee that works in the same state you registered your business in, then you’ll have to both withhold taxes from your employee’s check and pay state unemployment insurance in the state your business is registered in.
This makes it easy for a small business owner because you don’t have to deal with any different laws in other states. It should be noted, however, that some local regions require a local income tax to be withheld as well.
There’s only one incidence where things can get tricky and that’s if your employee works in your state, but lives in another state. Normally this would be handled the same way as an in-state employee, but that changes when the two states have a reciprocal agreement with one another.
So, what is a reciprocal agreement?
A reciprocal agreement is something that’s signed between neighboring states. It states that employees working in a neighboring state from their resident state, they can withhold their taxes in their home state instead of their work state.
For example, both Pennsylvania and New Jersey have a reciprocal agreement with each other. Illinois is another state with a reciprocal agreement, but they have it between four states -- Kentucky, Michigan, Iowa, and Wisconsin.
Reciprocal agreements are crucial because it saves the employee from having to file two state returns every year. They’ll be eligible for certain tax credits, but it still makes tax returns extremely frustrating year after year.
If you have the right payroll software, it could help make things easier for both you and the employee when dealing with reciprocal agreements. Some software programs even let you do a courtesy withholding from the employee’s check to avoid surprises down the road.
So, how do you set up reciprocal withholding?
Setting up reciprocal withholding with an employee isn’t a difficult process, don’t worry. First, your employee will be required to fill out a non-residency certificate. This certificate is what notifies the employer and government that the employee is excused from tax withholding in their work state.
The business owner won’t have to do anything with this form, except store it away for record-keeping. Once you store it away, contact your payroll provider and explain to them the situation so they can set up the correct withholding amount in the right state for you.
If your employee doesn’t have a non-residency certificate, they can get one by contacting their state’s tax agency.
Paying Taxes for Out-of-State Remote Employees
When paying and withholding taxes for out-of-state remote employees, the process is much different than in-state employees. It largely requires three steps to complete the process properly -- registering, learning, and taking action.
Let’s take a closer look at each step:
The first step in the process requires you to register your business with your employee’s home state. It’s one of the tedious things you need to do with each employee, even if you have employees scattered across the country.
In some areas, you might have to register your business with the various local tax agencies, labor agencies, and unemployment agencies in the home state. Of course, that’s only if it’s required in that state.
The second step in the process requires you to learn the different pay and labor laws inside your employee’s home state. There is a wide range of laws you need to understand if you want to avoid errors, mistakes, and penalties.
Some of the things you might want to learn include:
- Does the employee’s home state require you to offer worker’s comp insurance?
- Does the employee’s home state require you to give breaks? And do those breaks have to be paid?
- Are there any local income taxes that need to be paid in your employee’s home state?
- What are the state’s requirements for overtime and does it benefit the employee more than federal overtime laws?
- Does the employee’s home state require you to withhold state disability insurance?
- What laws and regulations does the state have regarding delivery of paychecks? What about an employee’s final paycheck?
- How often does your employee’s home state require you to pay them? Do they differ from your own state’s requirements?
- Does your employee’s home state require you to provide the employee with a paystub when sending out paychecks?
- Does your employee’s home state have a minimum wage requirement? What about the local agencies?
Once you can get these questions answered, you’ll have a much better idea of what you need to do when paying your remote employees that are out-of-state. It always helps to write down the answers to these questions in an accessible place so you don’t forget.
3. Take Action
Now that you have the information you need, it’s time to put that information to good use. When it comes time to pay your remote out-of-state employee, you’ll need to ensure you withhold the proper amount of state income taxes.
Not only do you have to withhold these taxes, but you have to file them with the state government and make a payment to avoid penalties. You’ll need to check with each state to make sure you do this frequently enough.
In addition to state income taxes, there are unemployment taxes you need to pay each paycheck. The rates for these taxes will vary by state, but you’ll receive the rates when you register for that state (see step 1).
If you’re looking for an easier way to manage these withholdings and tax payments, the right payroll software can do a majority of the work for you. It’s a large reason why so many businesses are taking advantage of what payroll software has to offer.
When searching for a payroll provider that’s right for you, contact Consultants In-A-Box. We can help you implement the right strategies and solutions to increase the efficiency and accuracy of paying remote employees.
And now that you know how to pay independent contractors correctly, you’ll have a much less stressful time come payday. For a business owner, that means more than you can imagine.
Tips for Evaluating Payroll Providers 0
Maintaining an efficient human resources department and payroll procedures is one of the keys to a healthy business. With so many different systems and software programs being used by different employees, the best payroll providers find a way to house them all under one roof.
If you’re looking to take better control of these departments and limit the costly mistakes made in the process, you need to know what is a payroll provider and how you can find the best payroll providers for small businesses.
Before you start your search, we have a variety of tips we believe will help you find the right payroll provider for your business. Let’s take a look!
1. Determine Your Goals
In order to find the payroll providers best suited to meet your needs, it’s essential you first understand what it is you want to achieve. Take into account your current and future goals for your business and how those goals can be met with the addition of an integrated payroll system.
One of the best practices when determining your goals is sitting down with the executives, senior leadership, management, and consultants within your company to discuss shared goals. It helps get everyone on the same page before looking at different payroll providers.
2. Determine Your Needs
Every business is unique and has different requirements they need to meet when managing payroll. Once you determine your present and future goals, it’s imperative you consider your actual needs.
This includes the various features and integrations you need across all software programs, different regulations you need to follow in different cities, states, or countries, and different types of employees you need to manage.
3. Focus on Privacy & Security
Anytime you’re dealing with human resources and payroll, you’re managing important, confidential, and sensitive information that belongs to your employees. As a business owner, your duty is to implement the right strategies and solutions to keep this information safe.
To do this, ensure you understand how and where your business’ information is being stored, how you can back that information up at any time, and what your payroll providers are prepared to do when fraud or issues arise.
4. Implementation vs. Adoption
When finding the best payroll providers for small businesses, it’s important to look at their track record to get a glimpse of how they’ve helped similar businesses in the past. Two of the major areas you’ll want to observe are the payroll provider’s implementation technique and adoption methods.
These two stages in the process are essential to getting your new payroll provider off to a smooth start -- especially when dealing with a large number of employees. Without constant communication and management throughout these stages, mayhem can strike at any moment.
On the other hand, payroll providers that take these stages seriously are able to get the new systems working efficiently in no time at all. Your employees will understand what they need to do and you’ll have a business full of employees on the same page.
5. Don’t Forget About the Big Picture
Getting past the implementation and adoption stages of the process are huge steps for your business, but it’s not the only thing that matters when looking at different payroll providers. You need a provider that extends their support well beyond these two stages.
Your business is bound to grow, especially if you’re constantly making smart decisions like the one you’re in the midst of making right now. Payroll providers need to be able to scale with your business and they should provide the support needed for any mishaps along the way.
You should always be thinking big picture when it comes to your business and your payroll provider is no different.
6. Cater to Data & Analytics
If you want to make smarter decisions when navigating your payroll and human resources procedures, you can use data and analytics to help power those decisions. They provide valuable insight into your current procedures and help you innovate others for future success.
Your payroll provider and integrated systems should support these needs and make them extremely easy to view. The more accessible they are, the more useful they are to you and your staff.
7. Understand the Payroll Providers in Front of You
Understanding a payroll provider’s features and offerings is essential to finding the right one for your company, but you shouldn’t stop there. You should commit your team to learn everything there is to know about the payroll providers in front of you.
Study their history, look at feedback or reviews from previous clients, and most importantly look into their dedication to the future. As your business finds new ways to innovate your industry, you should be teaming up with a payroll provider with common views.
8. Evolving Your Business Over Time
When automating and integrating certain areas of your business, it’s important to make sure it doesn’t take away from the human element of the business. These tools and resources are supposed to make your team more efficient, but they aren’t supposed to drive your team away from each other.
If you’re ready to start evolving your business and sparking the growth you’ve always imagined you’d see, it’s time to start taking better control of your payroll procedures. Now that you’ve learned what is a payroll provider, don’t be afraid to ask questions when interacting with payroll providers during the evaluation process.
Running Payroll 101: Tips for New Business Owners 0
Any business that wants to grow in a demanding market needs employees. Where there are employees, there’s payroll. Although payroll is an essential process when running a business, it causes one of the biggest headaches in business owners.
There’s no doubt payroll is one of the most feared things among business owners, but it shouldn’t be this way. After all, you signed up to be a business owner -- not an accountant. If you wanted to deal with numbers all day, you would’ve gone to school for it.
With that being said, many business owners today still rely on doing payroll manually every month. This might be the way you’ve grown comfortable doing payroll in the past, but it’s not how you should be doing payroll now or in the future.
In order to get through the payroll process accurately and efficiently, you need to have the right tools and resources available to you at all times. As you continue to read below, you’ll learn what some of those tools and resources are, as well as some common tips to help you through the process.
Let’s get started!
Should You Do Payroll Yourself?
Payroll is the process of making sure your employees are paid the right amounts at the right time. It’s the day you get to reward your employees for their hard work, but it’s also a day you can’t screw up because there’s a lot riding on this day.
Whether you have one employee or a team of 100+ employees, payroll is an essential process. It gets more difficult the more people you have, so making sure your payroll process has the ability to scale itself as your business grows is crucial.
In the early stages of starting a new business, payroll is manageable for the business owner to do themselves, but that doesn’t mean it won’t come with difficulties. You’ll need to understand the terminology, payroll tax laws, and basics of running payroll. In addition to that, you’ll have to trust yourself not to make a mistake.
With that being said, it’s always best to involve the right payroll software in your process to ease some of the pressure off yourself. You can also seek the help of a payroll assistant or entire payroll team if you have the cash flow to support it.
Do You Plan on Doing Payroll By Yourself?
If you plan on doing payroll manually, meaning without the help of an assistant or software, you’re going to need to prepare yourself for a tedious process. Each pay period is just as crucial as the next and you have to deliver your employees with a smooth payday.
The process involves four main stages:
- Determining the wages and pay amounts
- Taking into consideration the various taxes, garnishings, withholdings, and other payroll deductions
- Printing and signing the checks to be sent to employees
- Making the appropriate tax payments to the government on-time.
It’s a big commitment to do it manually but does come with its perks. You don’t have the added expenses that come with payroll help and software, as well as the added overhead to your business. At the same time, there’s a bit of a learning curve to it -- much like anything in the business world.
What do you need to do payroll manually?
One of the things that put your business in a tough position when doing payroll is not having the necessary documents and business items necessary. This can cause delays to come payday and put your employees in a tough spot as well.
To ensure you have all the proper documents and pieces of information before starting payroll, we’re going to list the essentials below. First, we’ll start with the business items you need to have in place:
- Federal Employee Identification Number - this number is given to you by the IRS and holds a similar responsibility as your social security number, just for your business instead of yourself. It’s a nine-digit number that you’ll use for everything including federal taxes, hiring, bank accounts, licenses, and permits.
- State and Local Registration - once you make your business official at the federal level, you need to do the same at the state and local level. This will help you pay state taxes, if necessary in your state.
- Workers Compensation - any business entity with employees should consider applying for workers' compensation coverage. It helps pay medical bills, as well as rehabilitation bills when workers are injured on the job.
- New Hires - if you plan on hiring employees to help with your business, you need to report those new hires to the federal and state governments. It’s important to get this done within 20 days of hiring the person.
Now, let’s take a look at some of the information you’ll need from your employees before starting payroll manually:
- Classification - your employees will have different classifications depending on the work they do and their personal lives. Making sure the government knows which employees are exempt and which aren’t is important, as well as whether or not they’re listed as an independent contractor.
- New Hire Documents - having employees and contractors fill out a W-4 form or I-9 form (or whatever form is needed) is essential to the onboarding process when bringing on new employees. You’ll have to make sure everything is filled out completely, properly, and accurately if you want to avoid penalties.
- Payments - there is a wide range of options when it comes to paying your employees and independent contractors. You can offer them all, a mixture of some, or a single option, it’s completely up to you. Depending on which you choose, you’ll need additional information from the employee in order to complete transactions.
If you don’t have all the necessary paperwork and supporting documents filled out ahead of time, there’s a good chance your employees see a delay in getting paid. This is crucial when performing payroll procedures manually and essential to keeping employees happy.
Calculating Payroll Properly
In order to calculate payroll manually, there are several things that need to happen or else you’ll be left scratching your head at the end of the month.
First, you need an effective way of tracking employees’ hours. Second, you need to understand the different types of pay. Finally, you need to calculate the wages.
Let’s take a look at each of these steps in more detail:
- Tracking - managing time and attendance is a crucial part of ensuring payroll is done accurately. Having employees keep track of this themselves can lead to inaccuracies, but certain software can make this a breeze and even automate certain parts of the process.
- Different Types - understanding the difference between gross pay (the amount the employee receives before deductions) and net pay (the amount the employee receives after deductions) is essential before calculating payroll. You also need to understand bonus pay and how that should be recorded and taxed.
- Calculate - now you’re ready to calculate the employee’s wages. If they worked 10 hours at $15/hr., they’ll be due a total of $150. This might change if they’re an independent contractor, but there’s also much more that needs to be done here.
Of course, there is a wide range of taxes and payroll deductions that need to be initiated before finishing payroll. We’ll get more into that in the following section.
Factors That Play a Role When Calculating Wages
If calculating an employee’s wage was as easy as multiplying their hours by their hourly wage, the payroll process would be a breeze for any owner with a calculator. In fact, some owners wouldn’t even need a calculator.
Unfortunately, the process is much more tedious and there is a wide range of factors to consider before being able to call it a day.
Let’s take a look at those factors below.
- Payroll Schedule - your payroll schedule is required when keeping yourself organized as a business owner. You need to know when your employees are to be paid when you need to pay taxes, and when you need to file tax returns. It’ll also help to keep an eye on dates you plan on giving out bonuses.
- Gross Wages - for an hourly employee who is non-exempt, simply multiply hours worked by wage (up to 40 hours per week) as we discussed above. For a salaried employee, divide their annual salary by the number of checks they’ll receive in one year (usually around 26) to determine their pay per payday.
- Overtime Pay - non-exempt employees that work more than 40 hours in a single workweek are subject to overtime pay, which is time and a half. Multiply the number of overtime hours by 1.5 and add that number to their gross wage.
- Wage Garnishments - there’s a good chance you’ll be notified of a wage garnishment against one of your employees. If you receive this notification, it’s important to let the employee know immediately and start deducting that amount from each check. You’ll also need to make sure the deduction is sent to the right agency to avoid a failure-to-respond.
- Benefits Contributions - your employees are bound to sign up for health insurance, life insurance, a 401(k) retirement plan, and much more when you own a business. Making sure these amounts are deducted from each employees’ checks is another crucial factor in the payroll process.
- Federal Income Tax - this needs to be reported and deducted from every check in order to properly calculate the employee’s tax liability at the end of the year.
- Social Security & Medicare - another payroll deduction that must be taken out before calculating the final employee payment amount. You generally pay half of this, while the employee pays the other half.
- Federal Employment Tax - federal (and state, in some cases) taxes are deducted from every employee’s check in order to fund unemployment compensation programs throughout the United States.
Once you’ve taken everything listed above into consideration, you’ll know exactly how much your employee is due. Of course, you’re still far from being at the finish line and now need to find a way to get that amount into the hands of the employee.
Printing Payroll Checks
When you’re printing your own payroll checks, you have two main options -- handwrite them and send them in the mail with a postage stamp (or deliver at work) or receive help from technology to prepare the checks for you.
Obviously, option No. 2 is going to save you a large amount of time -- and hand cramps. It’ll also be a much more safe and practical solution than having to do it all yourself. All you’ll need to do is make sure the checks get in the hands of your employee.
Tips When Doing Payroll Manually
An effective and accurate payroll process is key to any functioning business. Not only does it keep you in good standing with the IRS, but it helps keep employee morale at an all-time high when they receive their checks without delay.
Here are some of our top tips when doing payroll manually and how you can find more success with it:
- Make sure you classify employees properly to avoid confusion and mistakes.
- Make sure all federal, state, and local employment taxes are recorded and paid on-time.
- Make sure payroll is processed on-time each pay period -- make a habit of it.
- Have an effective way to easily track an employee’s hours with limited mistakes.
- Get your employee’s pay to them in the right form, whether they want a direct deposit or a check.
- Take into account bank holidays and adjust your payment schedule accordingly to improve employee morale during these times.
- Always double check your work -- no exceptions.
If you can follow these tips religiously when doing payroll yourself, you’ll put yourself and your employees in a good position when payday comes.
Is Manual Payroll the Way to Go?
Doing payroll yourself has its advantages when it comes to limiting overhead and outgoing expenses. You’ll still have some administrative costs to consider, but they’ll be much lower than having someone else take over full responsibility.
With that being said, doing payroll yourself is only worth it if you can justify the time lost each month managing everything yourself. The hours can pile up and also add frustration to your life that you don’t need as a business owner. Not to mention you live a busy life that might not give you enough time each month.
At the end of the day, you have to weigh the pros and cons when doing payroll yourself. Do you want the added responsibility or do you want to focus more on growing your company? That’s the real question.
What Do You Gain With Outsourced Payroll?
If you’re looking for an easier way of getting payroll completed every month, outsourcing these efforts is one of the most beneficial things you can do -- in addition to having the right software and tools necessary for success.
Here are some of the most prominent benefits you receive when outsourcing your payroll needs:
- Save an enormous amount of time each month.
- More efficiency, allowing you to focus on the things that matter most.
- Save money in the long run while having the time to grow your business.
- A much better sense of security when handling documents and payments.
- Having professional payroll help whenever you need it.
There’s so much to maintain when managing employees’ payroll and it eventually becomes too much for a business owner to handle. This is nothing to be ashamed of and only means your business is doing all the right things.
If you’re ready for a change and want some professional payroll help, contact Consultants In-A-Box today. We have the right expertise and software necessary to ensure your payroll needs are met with astounding customer service.
We can’t wait to help you take this enormous weight off your shoulders!