Altering the way you do payroll can be a daunting task. You must know where to store your tax ID numbers and you will also need to know how to transfer the payroll data. Below are a number of tips that can help first-time payroll software users change the way they do payroll in a manner which is headache free.
Collect Information About Your Business
When you begin using your payroll software for the first time, you will be expected to provide data which is related to your business. Having this data on hand will be very convenient as you don’t have to go digging for it which can be a hassle. Some of the things you will be expected to provide include the address of your business, as well as its legal name. It is also important to make sure your company is registered with the county clerk or local government. States will have different rules regarding business registration.
Determine Deadlines And Taxes
As an employer it is your responsibility to remit payroll taxes. You must withhold income taxes from the paychecks of your employees and you will also need provisions for unemployment taxes. Other items that must be withheld from the wages of employees include Medicare and Social Security.
The challenge to doing this is that each state has specific rates and rules for payroll taxes, which mean that prior to setting up payroll software you will need to determine your tax rates, both federal and local. You will also need to know the deadlines for these taxes. All this information will need to be entered into the software.
Collect Information From Employees
Installing payroll software will require you to enter the data of each employee, and this data must consist of their wage deductions, social security number, address, legal name and their tax filing status. All of this information can be found on an employee’s W-4 form. These forms are filled out when employees are first hired, and will be changed when they have children or get married.
Select Pay Periods
Payroll software will require you to establish a pay period. This is the schedule by which your employees are paid. Some employers pay their employees weekly while others pay every month or two weeks. Some regions have laws regarding the periods in which employees may be paid, so it important to be familiar with the rules governing your area.
Determine Employee Wages
The wages of each employee must be entered into payroll software. You will also need to note whether or not an employee is eligible or non-eligible for overtime pay. Some software programs may ask you about tips, which are usually received by workers who are employed in the hospitality business. Sales people earn commissions, and payroll software may have a separate section for this. Because these forms of compensation or taxable they should be entered into the software. Other forms of compensation that may need to be entered in payroll software include sick time or vacations which are paid.