Understanding How To Do Payroll And What To Do If You Can't
You would think that paying your employees would be easy, right? Write a business check, deduct the amount from your business checking account, done. Yet it is not so simple as all that. There is more to payroll than just writing a check. There is also help if you need it, as you shall see below.
Even if you have only five employees to pay, you still have to make deductions. You are their employer, and by law, you have to deduct taxes, Social Security, and Medicare for their future. They may enjoy not having these amounts removed from their checks, but they will not enjoy it at tax time.
Additionally, if you, as a small business owner, do not take out these deductions and mail them to the corresponding government agencies. If you do this, you can be fined or even jailed. Then you still would have to take out the deductions, mail them to the corresponding agencies, and pay your government fines. It is just easier to do what the law requires first. Also, if you provide any sort of benefits package or health insurance, you have to remember to take that out of your employees' checks too, or your employees will not have the benefits they think they do.
Itemized Check Stubs
Secondly, you are required to provide an itemized check stub to each employee each time you pay him/her. This tells the employee what was deducted and why. It is also required under the law in most, if not all, states. Even if you send a digital check stub that shows all the pertinent details, that is acceptable. If you need it, there is accounting and payroll software that can help you with creating printable checks, check stubs, and/or digital (sent by email) pay stubs.
Overwhelmed? Hire an Accountant Part-Time
Now that you know why you simply cannot write a basic check out of your business checking account for each employee, you might be feeling a little overwhelmed. If you can afford it, hire an accountant part-time to manage just the payroll end of things. The good news is that the accountant is not an employee, per se, so you can actually write that singular business check to pay him/her for his/her services. Then the accountant handles all of the payroll duties and enters all expenses, payroll expense accounts, and money sent to the correct government agencies while you focus on other things.
For more information on handling payroll, contact a company such as CADJ Pro.