How to Save Money and Get More Out of Your Payroll
Payroll is one of the most important components to any business. Without proper payroll, businesses can suffer financially and employees can have difficulty staying on top of their roles and obligations. In today’s challenging economic times, every business owner should be proactive in managing his or her company’s payroll. However, even with the many payroll management software options available, there are still several elements businesses must manage on their own. Here are 7 expert employee payroll tips to small business owners:
Set an annual payroll. The first step in any payroll tips for small business owners involves establishing an annual/regular salary. This can be done by taking employee and accounting information from pay stubs, current and past pay slips, or other official documentation. A common mistake is to take the total income of a certain employee, including taxes, tips, and commissions, and compare it to a set salary amount. However, this method often results in inaccurate calculations because tips and commissions can vary between individuals.
Know your legal responsibilities. Even if you don’t work in the United States, Canadian, or some other country, there are still labor laws that apply to employees. Most payroll tips for small businesses stress the importance of keeping all of your employees up to date on laws regarding minimum wage laws, overtime pay laws, unemployment laws, and other employment-related concerns. If you have employees from foreign countries, make sure they’re aware of their rights and aren’t trapped abroad without the ability to send their Social Security number at tax time.
Utilize a professional payroll data entry service. Even if your business isn’t required to use a professional payroll data entry service, it’s always helpful to have a payroll data entry service do your calculations for you. These professionals can complete all of your paper and electronic work, as well as prepare your government forms and taxes. They also keep track of your tax season data, so you’ll be able to accurately give your employees the correct tax deductions. If you have questions about using a service for payroll data entry, ask your payroll tips specialist what options are available to you.
Avoid pitfalls. Payroll tips for small businesses stress the importance of saving any receipts for taxes or benefits that you provide to your employees. If you allow your employees to buy food at the local supermarket with your company money, you must be sure to keep good records of what they purchased. Not only do you have to document each receipt, but you must also keep track of what each employee spent the money on.
Ask questions. Many tips for payroll process send the message that it’s smart to avoid asking employees questions about their taxes at any time. Yet if you allow employees to be in charge of how much money they make (including overtime) and then have them submit their own tax returns, you could be in violation of federal employment laws. By following these payroll tips, you may find that your employees understand the significance of the taxes they pay and are far more comfortable submitting their own papers or talking with you about the ins and outs of the payroll process.