Small Business Payroll Tax

Home » Small Business Payroll Tax

The following are the nitty-gritty details of how payroll is processed. It’s pretty basic stuff. But, I remember the first time I had to figure it out and I could have used an overview like this.

Setup For Filing Small Business Payroll Tax The payroll provider will collect information from you about each person who will be getting paid. These will be both full time and part-time employees. Of course, you will not pay contractors with payroll as you have no requirement to withhold taxes for contractors. (Just be sure that they are truly contractors for IRS purposes.)

The information collected will include all the information from IRS form W-4. This document is the one where employees calculate and tell you their number of allowances, name, address, marriage status, and social security number. By the way, this is the document that you as an employer legally must have employees complete within the first few days of their employment. Also, this information is highly personal and one of the reason why you need to be careful who you outsource payroll too.

When Filing small business payroll tax, service provider will also want to collect information about when the employee started, if they are full time or part time, what pay rate they will receive, if they are hourly or salaried.

Finally, you will need to provide information about any other deductions that need to be performed for employees such as deductions for healthcare or 401(k).

Processing Payroll You will need to request a payroll a day or two before payroll is going to be processed. If you chose to “call payroll in”, you will be calling your payroll service rep and providing them with the information they need for processing. This will include a confirmation of each person to pay so the payroll rep will want to review each person with you.

You will report whether to pay the regular salary if the person is salaried or the number of hours if the person is hourly. Of course you will want to tell them if there are any changes in rates of pay.

If you are using a payroll service that has a web based servicing option, you can enter this information on the website yourself. This will allow you to process payroll without having to make the phone call to the rep or have the rep call you. Filing small business payroll tax will occur after the payroll has been processed for your company. The vendor will both submit the proper forms and taxes on your behalf and in your employer account.

Payroll Checks

You have a few options available to you for the physical means of getting the money to your employees and/or yourself. Each has an implication on cost.

Manual Checks - The cheapest way to complete payroll. In this scenario you will simply tell your payroll company the gross amount of money that you intend to pay for an employee, they will figure how much payroll tax to withhold, deduct any other amounts that you withhold, and then tell you the “net” amount for which to write the check. Of course all the deductions will come right out of your bank account and eventually sent to the proper Government accounts on your behalf.
Self Printed Checks – You can buy pre printed checks that you can print out right from your printer. Laser printer checks are one to a page and you get them printed up by special services including Costco, who print the checks up with your information included the properly printed bank check number. You simple put the specially printed paper into your printer, print, and viola you have a professional looking check.
Payroll Service Check – The payroll service can print up all the checks for you and actually send them to you. The big services can actually have the checks hand delivered to your office or mailed to your office--overnight, 2nd day mail, or regular mail. Of course, these alternatives all cost more money.

Vacation time accounting

Your payroll processing company can also keep track of vacation time accrued by your employees. This can be very helpful because it’s helpful to have this information clearly communicated to your staff. The problem is that some payroll companies will want to charge you extra money for tracking it. It’s such a simple thing for them to do that I resented it but eventually gave in because I didn’t want to have to track it.

From Small Business Payroll Tax back to Payroll Information