When you own your own business, you have to pay your employees. However, exactly how much do you know about the payroll basics? Have you brushed up on the tax withholdings, deductions, and laws that regulate payroll?
It doesn’t matter if you’re a small business owner about to hire your first employee, or an established business with long-term personnel, you need to ensure you’re doing payroll correctly.
Learn how to do payroll for free
Learning how to do your own payroll can be very daunting. There’s so much that can go wrong and if you make a mistake, it not only affects you, but the well-being of your employees and you can risk getting penalized by the IRS. You have a huge responsibility, and it’s making sure the money is getting allocated accordingly.
Once you take the time to learn payroll, everything will fall into place. Start with the following basics:
Here are some more steps for how to learn payroll:
1. The IRS is there for you
Being as educated as you can about moving money around and the rules of payroll creates a lot of confidence. It also creates more independence, in that you won’t have to rely so heavily on the help of an accountant or lawyer when things hit the fan. Being a small business owner, you obviously may need someone to point you in the right direction until you’re on your feet and ready to operate things on your own. You should always make it a priority to learn how your money is behaving and why.
2. Consult your accountant
If you own a business, chances are you have an accountant. If not, it’s wise to contact a CPA and seek guidance on how to handle payroll tax filings.
A helpful accountant:
As a responsible business owner, it’s up to you to inform your CPA about any payroll tax notices from the IRS, especially if the CPA’s office will be handling your payroll tax filing.
3. Comply with the state
It’s not enough for your small business payroll program to comply with federal payroll tax laws—you’ll need to abide by your state’s tax laws, too. Your state’s employer info can be found at the USA.gov website, as well as the Small Business Development Center for your location.
4. Find a business mentor
A business mentor can also answer payroll questions as it helps you overcome the obstacles associated with establishing a small business. Having personal experience in learning the ins and outs of payroll, a mentor might be able to shine light on issues that have left you in the dark. If no one comes to mind as far as mentors go, SCORE is a helpful resource that offers free business advice.
5. Go to a payroll class
Consult the American Payroll Association (APA), as it provides new employers with helpful tools such as payroll training materials and payroll certification. You can attend courses with the APA either online or in person. Online classes make it super convenient for the small business owner who is already wearing many hats.
If you own a business, dealing with payroll is unavoidable if you want to have people working for you. Once you get over the fear of learning how to allocate your money correctly, it should be a 1-and-done lesson with the exception of adhering to any laws that might change going forward. Just make use of all the different resources available to have a law-abiding, successful business with happy employees.