Payroll can be a challenging task for any small business but with the right tools, it can become easy and routine. There are a number of best practices for payroll management you can follow to keep you and your employees happy. We asked experts to share employee payroll tips for a healthy, sustainable small business.
Here are 7 expert employee payroll tips for small business owners:
1. Establish a Payroll Budget
Eric Czerwonka, Co-founder, Buddy Punch
As your business continues to grow, so will your payroll expenses. It is essential to determine what your approximate budget will be. As a business owner, you are required to match both Medicare and Social Security that is withheld from your employee’s pay. Depending on where your business operates, you may also be required to pay other employment taxes. In addition to fixed costs, you must take into consideration variable costs such as commissions and benefits that might be associated with your payroll, along with time and attendance software. Take the time to sit down with your accountant to determine your budget and make an effort to keep your expenses as low as possible. The lower your payroll expenses are, the higher your profit margin.
2. Integrate With Your Scheduling & Accounting System
Jordan Boesch, CEO, 7shifts
Small business owners who employ an hourly workforce depend on accurate, timely payroll to ensure their staff are engaged and retained. Having a seamlessly integrated system that automatically pushes worked hours into a central accounting system will make payroll management faster, accurate, and more efficient. One of the best investments you can make in your small business operations is in an integrated scheduling and payroll system that ensures staff are paid in a timely fashion. This, in turn, inspires your staff to trust and rely on their schedules and to treat your business like it was their own.
3. Decide Carefully Between Salaries & Hourly Pay
Alex Littner, Managing Director, Boost Capital
Paying your staff a salary can make your payroll much easier to manage, as they always get paid the same amount. However, it might not make sense for your business model or for the type of work your staff are doing. Paying by the hour is more complex, as you’ll need to keep track of how many hours each staff member has worked and then calculate their pay each period. There are plenty of time sheet solutions out there that can make this easier for you to manage, allowing your staff to clock in and out themselves. Many time sheet solutions can also integrate with your payroll software so everything’s kept up to date.
4. Choose Your Business’ Payroll Schedule Wisely
Laurent Sellier, Vice President & Business Leader, QuickBooks Payroll
Small businesses have a lot of options when it comes to how often they pay their employees, and there are a lot of factors business owners must consider when deciding how often to run payroll. Will it be weekly, bi-weekly, bi-monthly, or monthly? That typically depends on the overall size of the company. Smaller businesses that employ fewer workers may be able to get away with a more frequent payroll schedule. However, as your business grows, your needs may change.
5. Stay Compliant With Payroll Laws
Maggie Aland, Marketing & Review Editor, Fit Small Business
As an employer, you need to comply with your state’s labor laws and provide payroll accurately and on time. This task can be challenging as you hire more people with different employment classifications and benefits. Reduce the risk of expensive legal penalties by using Gusto, an all-in-one payroll and HR software. Gusto’s payroll software provides payroll and labor law compliance in all 50 U.S. states, and makes it easy to properly manage paid time off in addition to regular pay. Try it free for 30
6. Set Up Direct Transfer of Payroll Taxes
Sandeep Todi, Co-founder, Remitr
Oftentimes, the payroll tax payments transfer from your bank account directly to a government account. If this is not set up properly, it can end up delaying your tax payments and incurring penalties.
7. Invest in a Payroll Task Manager
Chane Steiner, CEO, Crediful
While many business owners handle payroll and check signing personally, this can end up taking many hours of your time each month. If you consider that your time is money, investing in a task manager is well worth the investment. This will also keep your employee’s information more organized and will make tax time a relative breeze. Additionally, it can manage other things like unemployment and workers’
Learning the basics of employee payroll provides a sound foundation for a successful business. You not only learn how to work efficiently within your budget, you also attract the best talents around the country with your best practices. Follow our list of expert employee payroll tips and maximize your business’ potential for growth.
Original Source: FitSmallBusiness
Author: Lakshmi Raj, Co-Founder and Co-CEO, Replicon