The key to keeping your employees happily working as hard as they could is paying them properly and on time. It’s only right — they worked hard for it, and they need to get compensated. Befittingly.
Your employees trust you to deliver their payments on time, especially when you’ve asked them to work several extra long hours in the evening (overtime!), and when they’re lolling away on a beach and they’re counting on the extra cash to be direct deposited into their bank accounts (vacation pay!).
And you need to deliver. Sometimes, the way to your employees’ hearts is through their properly padded pockets.
The only way to avoid drama and the awful tax penalties (that ultimately add up to a lot) is to make sure that your payroll is running like a well-oiled, drama-free machine.
Here are three ways in which you can handle employee payroll suavely, depending on what your business or company needs:
1. DIY manually
If you’re good with numbers and taxes, and you’re dealing with considerably few employees (five or less), then you may choose to do your payroll yourself. Basically, this involves the manual computation of your employees’ payment and taxes using your trusty calculator and spreadsheet.
What you need to remember:
- You need to have a lot of time and patience on your hands. This is the cheapest option, but it certainly comes with a price. Manually computing your employees’ pay comes with its headaches — and if you’re not entirely savvy, you may end up with a lot of costly mistakes over computing overtime work. You’d also need to properly track employee hours.
- Know your forms, numbers, and laws. You need to have your employees fill out the W-4 form so you can process their payment. This form is important for you to know their tax exemptions, the number of dependents, and other important information. As a business owner, you would need to get an Employer Identification Number or EIN, complete a W-2 or 1099-MISC form, state withholding forms, pay workers’ compensation and unemployment insurances, among others. It’s also a great idea to brush up on basic labor laws while you’re at it.
- Have a schedule and stick to it. It’s easy to miss important due dates when you’re not keeping track of them (and when you have no one but yourself to remind you). So always remember your pay periods, payment dates, tax filing and payment dates.
- Get a payroll software to help you out. There are a lot of software available in the market, all of which aim to make payroll processing relatively stress-free (or at least less of a hassle). Check out product reviews, articles, and compare which ones suit your needs and your budget. It’s also a good idea to test run as many as you can before you fully commit to getting one.
2. Get a full-service payroll provider
If you want to outsource your payroll to a specialist who knows exactly what to do with a payroll software and handle everything for you, getting a full-service payroll service might be the ticket. Examples of full-service payroll providers are ADP, Intuit, and Sage, to name a few.
What you need to remember:
- You need to get the best full-service payroll provider for your business. As you would have to surrender a lot of information and control for the payroll provider to process everything from payroll to taxes, and make sure that all taxes are paid on time (because they’d be shouldering the penalties). So it’s important to get the best one for your business. Check out their years of expertise, reviews, and get to know what kind of features they offer to their clients (such as if they offer 24/7 support) and what kind of businesses (as well as their sizes) they’re able to handle.
- It’s not cheap. This service is typically not cheap. Prices may also increase depending on the type of features you’d like to have such as if you’d like payment processing, HR compliance, time and record monitoring, among many others. The add-ons depend on what your business needs.
3. Hire a full-time or part-time accountant
If you have a lot on your plate when it comes to running your business and you simply want to get the job done, you may opt to hire an accountant. Accountants are trained to know the payroll process like the back of their hands and are experienced and familiar with all the forms and dates needed to keep your business compliant and drama-free.
What you need to remember:
- You need to hire a great accountant. Seeing as you would delegate your payroll and tax responsibilities to someone else, you would need to make sure that you hire the right accountant. Make sure that your accountant has relevant experience in your industry, knows how to handle a larger number of employees (because you’re aiming for growth!), and of course, is trustworthy, honest, and has integrity. Make sure to get good recommendations for applicants.
- It’s not cheap, too. Quality service is worth a pretty penny. And getting the service of good accountants, even part-time ones, are costly. However, if you’re interested in putting your payroll needs in good hands, consider this as an investment. Good accountants will also be able to provide you with stellar financial advice, so they would be able to go beyond just processing payroll and taxes.