How to Run Payroll for Your Small Business

February 18, 2024
Published by Gonzales Group CPA

Running payroll for a small business is an essential task, but it’s not just about paying employees. It involves compliance, accuracy, and timeliness. Here are some guidelines for running payroll for your business or you can always contact Gonzales Group, a respected CPA organization that also does payroll services in San Antonio.

• Set up payroll before you hire your first employee. You should have an Employee Identification Number and you should be registered as a business and obtain a state business ID. You will also need to register in the Electronic Federal Tax Payment System.
• Collect accurate information from your employees, including their full names, addresses, Social Security numbers, and tax withholding forms. Ensure that this data is kept secure and up to date.
• Establish clear payment schedules for your employees, whether it’s weekly, bi-weekly, or monthly.
• Determine each employee’s gross pay based on their hourly rate, salary, or commission earned during the pay period. Be sure to factor in overtime, bonuses, and any other relevant earnings.
• Withhold federal, state, and local taxes from employee paychecks as required by law. Additionally, you will need to deduct contributions for benefits such as health insurance, retirement plans, and any other voluntary deductions.
• Input the necessary information into your payroll system and review the payroll summary for accuracy. You should double-check calculations and ensure that all deductions and contributions are applied correctly.
• Distribute paychecks or set up direct deposits according to your chosen payment method. You will need to provide employees with detailed pay stubs outlining their earnings, deductions, and net pay.
• Submit payroll taxes to the appropriate government agencies on time to avoid penalties. Be sure to file quarterly and annual reports– such as Form 941 and Form W-2– accurately and punctually.
• It is important to stay informed about changes to tax laws and regulations that may affect your payroll process. Regularly review and update your payroll procedures to ensure compliance with legal requirements.
• Finally, maintain thorough records of payroll transactions, including pay stubs, tax filings, and employee records. Store these documents securely and retain them for the required period.

While reliable payroll software can help you manage this, it’s still time and effort taken away from the main focus of your business. Ultimately, you may find it easier and more financially sound to outsource your payroll to a reputable provider such as Gonzales Group, which can take care of your payroll services in San Antonio. We can keep this portion of your business running smoothly and without error, so contact us today to learn more about our services.

Categorised in: Business Tips, How to Run Payroll for Your Small Business, Tax Info, What Does a CPA Do?

This post was written by Gonzales Group CPA