A Business Payroll refers to the total amount of wages paid by an establishment to its employees and other third-party entities (contractors and freelancer) that have proffered services to the business.
An excellent business payroll processing system is crucial for the continued growth of a business. It is an important function of any business not minding its size and may likely be the company’s most considerable expense. It is also one of the most time-consuming administrative tasks that may be performed each month.
While many payroll systems may apply from one company to another, it is still a complicated system to set up and use. Therefore, it requires an organized system, awareness of current regulations, and careful planning.
Therefore, to help you understand the business payroll procedure, here are some steps involved:
Before processing your business payroll, your employees will have to fill out some paperwork and provide documents such as health insurance plans, income tax withholdings, and retirement plans. Also, you must know that deductions are not to be made from the paychecks of all freelancers. These individuals manage their own taxes and pay for their benefits.
If you charge some of your workers by the hour, you must authenticate the information about the hours worked by these employees.
When carrying out your business payroll processing, ensure you understand how much each employee costs concerning your business. This, however, goes beyond their salary. To do this, there are four critical factors you must remember:
This refers to the total amount your company pays each employee before deducting taxes and other deductibles. Deductions may include anything from retirement plan contributions, insurance premiums, tax withholdings, and benefits. Naturally, at the end of these deductions, what you pay your employees as paychecks is called the net pay.
Businesses may cover the cost of benefits, but a portion of it may generally come from the employees’ gross wages.
Deductions must be made regarding social security and Medicare payments from your employees’ gross wages.
Your Business must collect federal and state income taxes from the payroll to be remitted at a set timeframe to the appropriate tax authorities. Also, businesses must regularly send payroll tax reports, annual unemployment tax report and quarterly reports to the relevant tax authorities.
When your business payroll has been analyzed and all errors corrected, you may then make payments to your employees. Generally, businesses may either chose to give out paychecks by direct deposit or business checks, depending on your business preferences and your employees’ choices.
However, payroll processing must be done accurately and consistently for many reasons; one of which is your legal obligation to pay your employees. When you fail to pay them on time or make substantial errors with regards to their paychecks, it may ruin your company’s reputation or result in legal charges against your business.
Compliance with an accurate payroll processing system can be complicated, but it does not have to be that way. Why not seek an entirely outsourced payroll service to take this daunting task out of your hands? Contact us: (212) 320-8191 or by email at email@example.com.
Urgent Tax Services
6009 16th Ave,
Brooklyn, NY 11204
Ph. (212) 320-8191
Fax (646) 626-6447