How To Do Payroll - YouTube

hi folks dave waring here again with FitSmallBusiness.com and today's lesson

of the day

in today's video we're going to continue our series on how to hire and manage

with a look at the basics of payroll and how to pay your employees

so let's get started one of the advantages of working with independent

contractors is that you simply write a check and it's the contractors

responsibility to pay taxes. If you decide to hire employees however then

you are required by the federal government

most state governments and some local governments to withhold taxes from their

paycheck and remit those funds to the appropriate tax authorities. In many

instances companies will also withhold or deduct money for things such

as insurance premiums and ira contributions

there are three options for doing payroll: 1. Do it yourself

2. Hire part-time accountant or 3. Use a payroll software solution. For most small

businesses we think payroll software offers the best combination of

efficiency and cost Intuit's full service payroll solution which is

popular among many small businesses cost $79 a month plus $2

for each employee paid using the system

after initially setting up your payroll software the process of paying your

employees should take less than an hour per week.

Your payroll software should let you do the following: calculate employee gross

pay, calculate employee take-home pay after income taxes FICA and deductions

for things like health insurance retirement and child support pay

employees by printing out checks are making a direct deposit fill out and

submit required paperwork for federal state and local income taxes send

electronic payments to the tax authorities

regardless of whether you use payroll software or some other method for

handling your payroll in many instances you will need a way to keep track of the

hours that your employees work in order to calculate gross pay

how should you keep track of employee hours if you have a few employees with

little variation and hours from week to week you might use a google or Excel

spreadsheet for tracking hours

I've included a link to a free excel timesheet template in the resources link

below this video if you have lots of employees and or the hours they work

very

there are a number of free and paid software solutions available time clock

free.com offers the ability for employees to check in and out of work

from assigned computers which might be very useful if you're dealing with lots

of new employees that might not always be punctual about showing up at their

assigned hours for a top-of-the-line solution with tremendous functionality

and customer support consider replicon . com dealing with over time depending on

how many hours and employee works per week or per day

you may owe them overtime pay for companies covered by federal labor laws

which are companies with over 500 k and sales and or that are involved in

interstate commerce

you will need to pay most employees 1.5 times their hourly rate for every hour

per week over 40 for example a worker that gets paid twenty dollars per hour

would receive thirty dollars per hour for each additional hour exceeding 40 in

California there is a daily limit of eight hours per day before overtime pay

kicks n even if the employee doesn't work 40 hours per week

I've included a link in the resources link below this video to a list of

overtime loss for all 50 states many salaried employees are also owed over

time if they work more than 40 hours per week

employees with managerial duties or that have a fair degree of decision-making

power tend to be exempt from overtime pay requirements

I've included a link in the resources link below this video where you can

learn more about the difference between exempt and non-exempt employees dealing

with vacation and sick days

employers have a great deal of discretion and providing paid vacation

time and paid sick days for their employees

however you should have a company-wide policy and a system for recording the

accrual and use of both vacation and sick days into its payroll solution

definitely offers the ability to record the accrual and use of both vacation and

sick days and we assume some other payroll software does as well

I've included a link in the resources link with more advice on creating a

vacation and sick leave policy voluntary deductions in some cases

employers may need to also provide employees the ability to have certain

things deducted from your paycheck

these include things like contributions to an IRA or 401k plan

health insurance premiums and job related expenses

these deductions can be made on a pre or post tax basis depending on what the

deduction is for and can easily be handled by most payroll software

reporting requirements and payments

once you have calculated your payroll you will need to complete the necessary

reporting requirements and submit payment in the required timeframe

here's a list of the paperwork involved although unemployment insurance payments

are not included in payroll

because they are based on payroll you will use your payroll calculations to

pay unemployment insurance as well I've included an article in the resources

lake with more on the timing requirements and how to know when you're

required to submit payments the benefits of a full-service payroll solution

payroll software solutions can help you figure out the amount you need to pay

however they don't always automatically complete or send the necessary forms or

make payments to the tax authorities on your behalf

this is another reason why we recommend working with into it or a similar

full-service payroll solution which handles these things for you as an

example into its full service solution offers the following services

you can learn more about this service in the resources link below this video

what questions or comments do you have about handling payroll that were not

answered in this video

let us know in the comments section below for more great advice on how to

start and run a successful small business

also be sure to visit us at fitsmallbusiness.com today thanks for

watching