This article will outline the steps you need to take when setting up payroll in your small business. This article also contains tips to help you expedite the process and remain compliant with IRS guidelines.
Payroll for small businesses – automated vs. manual
You have two choices when setting up payroll: manual record management or automated payroll software.
Small business owners can use manual payroll systems.
Each business has slightly different requirements for reporting. Payroll management by hand is a way to do this without specialized payroll software. If you only have five employees, this can be an affordable option.
You will need to:
- Register your business and request an employer identification number from the IRS.
- Each team member should complete the W-4 form
- Select a schedule for your payroll – weekly, biweekly, or monthly
- Employees can punch time cards and fill in time sheets
- Calculate the appropriate federal withholding and state withholding
- Tax on insurance or retirement benefits
- Manage your paid time off balance
- Pay your employees using direct deposit or checks ( ACH).
- Fill out any tax forms, such as the employee W-2 withholding.
Payroll systems for small businesses
Many businesses begin with manual payroll processing. Many companies switch to payroll software to automate or combine some of the tedious steps listed above.
You’ll need an EIN even if you use payroll software. When hiring new team members, you’ll need to manually input each employee’s Social Security number and W-4 withholding details. The workflows will become more efficient in the future. The payroll software will collect employee attendance data, calculate deductions for taxes and benefits and manage direct deposits according to your payroll schedule.
Tax preparation is also made easier with digital tracking and detailed reporting. Many platforms are cloud-based so that you can manage your payroll from any computer, tablet, or smartphone. Some payroll tools offer a token to access that allows employees to enter their information securely without you having to.
Payroll automation with integrated software
Clover POS comes with several features that are designed to save you time. You can track employees’ hours, create detailed reports on their performance, and protect sensitive employee data.
Our POS systems are compatible with the most popular payroll software, including Gusto and Paychex. The Clover App Market offers a variety of third-party plug-ins that can help you with the following:
- Hire new talent
- Team members can share pool tips
- Track delivery drivers (in real-time)
- Distribute bonuses, commissions, and rewards