When you become an employer, you have a new set of responsibilities both to your workers and to the government. One of the most important of these is the proper handling of payroll taxes. To avoid legal and financial trouble stemming from mismanagement of these taxes, here are a few things every employer should do.
1. Learn About Forms and Taxes.
Regardless of whether or not you will be handling payroll in-house, you and your accounting staff should be familiar with how they work. This understanding helps ensure that forms (like Form 941 or Form W-2) are remitted on time, that calculations are correct, and that you can discuss payroll issues with employees with confidence.
2. Prioritize Tax Remittances.
When there isn't a lot of money available at your company's discretion, prioritization of the right expenses is vital. This must include timely and regular payment of all taxes. If you withhold any taxes from employees and fail to remit this as required, your company may end up with non-dischargeable penalties and responsible parties could be charged with a crime.
3. Use a Payroll Service.
A payroll service is a wise investment for any size employer. Professional services take much of the burden off your company, providing simple means to enter data and do calculations for taxes, reminders about tax due dates, and mandatory record-keeping in accord with state or federal rules. If you're on a budget, most payroll services allow employers to tailor which services they use.
4. Use Calendars.
Because there are many payroll-related deadlines and due dates, use dedicated calendars with automatic notifications to ensure you don't miss anything. Calendars should not only note deadlines, such as when payroll should be sent to the service or when a tax remittance must be made, but also should help clear time in advance to prepare these forms or processes so they'll be ready.
5. Schedule Tasks Early.
Whenever possible, payroll jobs should be started early. Tasks like reconciling a payroll tax account with Form 941 may take much longer than expected. Employees aren't always diligent about turning in their time. And other work can get in the way of focusing on payroll. But many of these tasks can't be delayed either. So start early, finish early, and remit early, when possible.
Which of these payroll tips can you apply to your company? No matter what you do to keep the ball rolling and keep things accurate, your business will benefit. Get more suggestions and guidance by contacting a payroll service.