Staying current and on top of your payroll can be challenging and time-consuming. Do you take care of your payroll in-house or outsource your payroll? For many business owners that attempt to take care of payroll themselves, it quickly becomes a headache they can’t handle. Approximately sixty percent of small business owners today handle their own payroll according to the National Business Association Survey. If you are doing your own payroll, it is important that you are organized, diligent and up to date with all state and federal regulations concerning employees and payroll. Here are six NH Payroll Tips to help you manage your payroll.
1 Determine how to pay your employees
For most employers in the Upper Valley region, putting employees on salaries is easier to manage. A salaried employee takes the stress out of determining how much you need to pay that employee each week, bi-week or month depending on your pay schedule. One advantage is it keeps things consistent and predictable for your business.
The second method is hiring and paying your employees by the hour. This can become very time consuming if you don’t have an accurate tracking system for the hours worked and compensation. This also will be a little more challenging because the pay to each employee will fluctuate each week depending on hours worked.
2 Decide when to pay your employees
Before you even hire your first employee you need to determine what the pay schedule is going to be like. Are you going to pay weekly, bi-weekly, or monthly? This will help you to stay organized in your payroll.
3 Make sure you classify your workers
May small business owners make the mistake of not classifying their employees correctly. It is important whether you hire full time, part time, interns or independent contractors to properly classify them for payroll purposes. If anyone is working at your location on set hours that you schedule them, then they are not a sub-contractor, they are considered an employee.
4 Keep track of everything
It is important to keep track of everything when you are doing your own payroll. Make sure you keep all of the payroll documents in the same place. Keynote: There are some federal and state laws that require you to keep records for your company anywhere from 3 years to 7 years. Check your state for their current laws. It is a very good idea to keep track of all w-4 and w-2 forms, tax forms, benefits, vacation time and tax deposits. If you ever get audited, you’ll need this information handy.
5 Don’t forget to factor in raises and benefits
To make it easier for you, give them additional benefits as a type of reward. Here are some ideas: give them a stipend for childcare, a new laptop or additional insurance. These are just a few tax-free options you can give your employees that create long-term loyalty.
6 Don’t forget wages and taxes
When you are planning your budget for your business, don’t forget to plan for wages and taxes. Employers are required to pay social security and Medicare taxes and in many states, you are also required to pay unemployment taxes, so make sure you plan for this in your budget when you hire an employee.