Setting Up Payroll for Your Small Business

//Setting Up Payroll for Your Small Business

Setting Up Payroll for Your Small Business

Hiring your first employee is an important step in the growth of your company. Having employees frees you to focus on building and growing your business. But there are important steps you must take before writing your first paycheck as well as certain decisions to make about how you will administer payroll.

Before You Hire

Do research by reading the U.S. Dept. of Labor website and your state and local websites regarding employment. This research will direct you to certain first steps. For instance:

  • Apply for your Employer Identification Number (EIN) – you may also be required to have special  state or local government IDs
  • Set up your Electronic Federal Tax Payment System (EFTPS) to pay your federal taxes
  • Determine benefits and withholdings
  • Determine if employees will be salaried or hourly, and if hourly, whether they will be exempt or non-exempt from overtime pay
  • Set up accounts for your state taxes, withholdings, and new-hire reporting
  • Write your employee handbook and have it reviewed by a lawyer specializing in employment law
  • Have your employees complete the W-4 (personal allowance) and I-9 (Employment Eligibility) forms

Administering Payroll: In-House, Service, or Expert?

You can choose to handle payroll in-house, with an online service, or with a tax accountant. There are benefits and drawbacks to each option.

If you handle your payroll yourself, you have more flexibility.  You can input the numbers at 2 AM the night before payday. With this method, your only cash layout is for the software you choose to use. But time is money, and payroll can take an entrepreneur several hours a week. There’s also the possibility of errors and liability if you file late.

A payroll service solves several of these problems. The service knows what information what information you need to provide and all the tax filing due dates. Furthermore, it will take responsibility for all of the filings. This is a tremendous relief for many small business owners. The drawbacks are that you will need to get information to them several days before payroll, and of course, they are more expensive than doing it yourself. But your time is freed up, allowing you to focus on making more money.

Hiring an accountant provides the benefits of a payroll service and more. Your accountant has your best interest in mind. While services and software wait passively for you to enter data, a good accountant will proactively advise you in extra savings and efficiencies that may help you save money or make more money. An expert can help you with the initial set-up, which may seem a bit mystifying, and may be able to offer other ideas over time to help you grow your business.

With the increased ease of communication across the nation and the world, having a local accountant may not seem as important as it once was. But it is still an advantage in many ways to choose someone from your own community, whom you can visit in person and who can give you solid advice with the local area in mind. If the accountant specializes in your field, he or she will know any deductions or requirements unique to your industry and will lead you through the tax maze with more money staying in your pocket.

Hiring employees is great for your company and great for the economy. We invite you to come in for a meeting to discuss this important step as you grow your business to determine together how we can help you.

By | 2018-10-25T12:41:27+00:00 August 9th, 2018|Small Business|0 Comments

Small Business Accountants

F.J. Koelle & Associates are Certified Public Accounts (CPA) specializing in small business and corporate accounting and business and personal tax preparation.

Willow Grove PA Accountants

We’re accounts in Willow Grove PA and provide accounting services and tax preparation for clients in Willow Grove, Fort Washington, Abington, Jenkinton, Warminster, Feasterville-Trevose.

Contact

F.J. Koelle & Associates, P.C.
Certified Public Accountants
410 Easton Road
Willow Grove, PA 19090

(215) 659-5000

fjkoelle-cpa.com