Small Business Payroll Challenges

March 23, 2025
Published by Gonzales Group CPA

As a small business owner, being in a position to hire employees is a great feeling, but it comes with a new set of challenges, specifically payroll. To avoid any risks and reduce the amount of time involved, consider turning to The Gonzales Group and our payroll services in San Antonio. To help you understand what’s involved, here are some of the biggest payroll challenges for small businesses.

While it’s tempting to handle payroll yourself, the time and effort that goes into manually managing payroll can be a real drain. It’s not just a matter of tracking employees’ hours. There are complex calculations involved, which leave you open to mistakes and potentially penalties, not to mention losing time that you could be spending on further growing your business.

As well as determining the type of employee – independent contractor vs employee – you need to consider a number of other factors in determining payment. These include pay rate and hours worked, but they also include any benefits and deductions, such as paid time off, retirement contributions, and health insurance. It’s also vital to factor in federal and (possible) state withholding, as well as social security and Medicare taxes, and unemployment taxes. Taxes alone vary by different factors, plus they often change and you’re responsible for keeping up to date. This is where the possibility of errors becomes significant.

You also need to make sure you are compliant with all wage and labor laws, particularly overtime. The Fair Labor Standards Act requires careful tracking and payment of overtime, which is at least 1.5 times the hourly employee’s wage once they’ve worked more than 40 hours in a week.

Ultimately, there’s a significant amount of paperwork required to properly track all aspects of payroll to be turned over to the IRS. This includes tip and wage records, income tax withholding forms, and tax returns, along with the company and employee information. How often you file also is impacted by how many employees you have.

With so much to keep track of, many small business owners turn to trusted companies like The Gonzales Group for our payroll services in San Antonio. If you’re starting a new small business or are feeling overwhelmed by payroll requirements, contact us today and let us help you stay on top of your payroll needs so you can focus on your business.

Categorised in: Business Tips, Finance Info, Money Saving Tax Strategies for Small Businesses, Small Business Payroll Challenges

This post was written by Gonzales Group CPA