In any business, handling the payroll can be a challenging aspect of running a business, most especially that there are tax laws surrounding it and makes it even more complex. Whether you have a small or big business, the majority of spending goes to wages. That is why we presented five tips on how to do an effective payroll for your business.
1. Categorise your employees.
It is important to classify whether your employees are full-time or part-time. There are times when a business hires employees hourly. This is of critical importance when it comes to exempt and non-exempt status for overtime purposes. It is also important to classify employees whether they are full time for your business or as an independent contractor since there are differences in the payroll when it comes to these cases.
2. Set your payroll budget.
It is important to always set your payroll budget and always make sure that payroll taxes are paid. You should bear in mind that failing to pay for these taxes can be critical for your business. Check whether your current location if they are requiring other additional taxes to pay and include it in your budget as well. In this way, you can see the bigger picture of your expenses for the payroll.
When it comes to increasing an employee’s salary, you can consider implementing a tax-free fringe benefit to help your employees get what they deserved. Increasing the basic salary of your employees may also increase the tax they will be paying.
4. Automate your payroll.
Consider this strategy so that you can avoid paying for penalties if you tend to forget your payment to the government. Falling behind on payroll tax deposits are not only costly, but it can be a threat to your business. You can ask for your payroll-processing company to automate these taxes on your behalf.
5. Get help.
Whenever it gets harder for you, consider hiring a bookkeeper on your behalf. It can also benefit the company because you can focus on other things and you can be confident that there is someone skilled for the job to do it for you.
Eclat Accountancy Ltd can help you with it. We have the best accountants and bookkeepers who can effectively do your payroll on your behalf. Visit their website here.