How to Do Payroll for Small Business

To handle payroll for a small business, begin by obtaining an Employer Identification Number (EIN) and registering with your state as an employer. Develop a clear payroll policy that outlines pay schedules and wage calculations, ensuring compliance with federal, state, and local laws.

After obtaining an Employer Identification Number (EIN) from the IRS, which is necessary for tax purposes, follow this guide with these essential steps:

1. Register with your state as an employer, ensuring compliance with local laws.
2. Set up a payroll schedule that aligns with legal requirements and your business needs. A biweekly pay period is commonly used.
3. Track employee hours accurately, whether through manual methods or payroll software.
4. Calculate gross pay, deductions, and net pay for each employee, taking into account federal, state, and local taxes.
5. Pay payroll taxes on time using the Electronic Federal Tax Payment System (EFTPS).
6. Maintain accurate payroll records to comply with IRS regulations and prepare for tax filings.
7. Consider using payroll software or hiring an accountant to streamline the process and reduce errors.

Learn more about how to do payroll for your small business and discover how the right tools can transform your business. Explore our expert software guides and reviews today:

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• Contractor Foreman Review

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