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How To Do Payroll For Small Business

The Growing Challenge of Multi-State Payroll

Business owners, CFOs, and HR professionals know how complex the payroll process can be. When your company hires employees that live across multiple states, however, it becomes even more challenging.

 

Varying tax regulations and location-specific wage laws make it difficult to remain compliant. The rise of remote work means these complexities are becoming even more prevalent, ultimately costing companies time and money.

 

The administrative burden of multi-state payroll can lead to costly errors—particularly for small businesses. Professional employer organizations (PEOs) step in to alleviate some of that pressure by handling administrative tasks like payroll management. This means growing companies can stay focused solely on running their business.

 

Let’s take a closer look at multi-state payroll compliance, why traditional payroll may not be the right choice for your company, and how PEOs help simplify the payroll process.

 

Understanding Payroll Compliance Across State Borders

If you’re a small business owner, hiring remote workers means having the ability to access a larger pool of talent beyond your specific area. This can be incredibly beneficial for your business, but it also comes with challenges.

 

One of the biggest challenges companies should consider when hiring talent across state borders is remaining compliant with rules and regulations regarding payroll. Not only do these laws evolve constantly, but they also tend to vary from state-to-state. If your company falls out of compliance, you could be faced with hefty fines and penalties.

 

When hiring workers across multiple states, it’s important to keep in mind that state income tax rates, unemployment insurance requirements, wage and hour laws, and benefits mandates will vary depending on where your new employees are located. Keeping up with those regulations can be especially difficult for smaller businesses or companies without a human resources team.

 

Why Traditional Payroll Systems Fall Short

Traditional payroll systems typically handle one-size-fits-all scenarios. While they may process paychecks efficiently, they may not take multi-state payroll compliance into account.

 

In many cases, generalized payroll processing can lead to miscalculated tax withholdings, late or inaccurate state filings, or noncompliance with state wage laws.

 

How PEOPayGo Makes Multi-State Payroll Easy and Accurate

From streamlining payroll and ensuring compliance to flexible pay-as-you-go programs and expert support at your fingertips, PEOPayGo makes multi-state payroll easy and accurate.

 

1. Payroll Compliance

PEOPayGo specializes in understanding and keeping up with state and federal rules and regulations when it comes to payroll. No matter where in the United States your workers are located, PEOPayGo ensures that your business will remain in compliance with those laws.

 

2. Streamlined Payroll Processes

Beyond remaining compliant with state and federal regulations, a streamlined payroll process is essential to keep employees happy and your company thriving. PEOPayGo’s platform simplifies the entire process, from onboarding new employees and time tracking to tax filings and benefits management. Automating your payroll processes with the help of PEOPayGo also ensures that it’s done accurately and on time.

 

3. Expert Support

The team of experts at PEOPayGo is always available to help with what you need—whether you’re unsure of how to handle an employee moving to another state or you’re trying to understand varying wage laws. When you partner with PEOPayGo, you’ll receive the support you need as a small or medium-sized business.

 

Simplify Payroll with PEOPayGo’s Multi-State Expertise

Managing payroll across multiple states can be complicated, and as a small business owner, you likely have a lot on your plate already. It can be difficult to keep track of varying wage laws by state, especially when rules and regulations are constantly changing.

 

When you work with PEOPayGo, you can rest assured that your business will remain compliant with state and federal regulations when it comes to payroll. Not only will you receive compliance support, but you’ll have streamlined payroll processes to help your organization simplify and thrive.

 

If you’re a business owner or HR manager with multi-state or remote employees, reach out to PEOPayGo today to get the payroll support you need.

 

Contact us today to get the coverage and support you need!

How To Do Payroll For Small Business

Seven Steps to Setting up payroll for small businesses

Starting a small business can be an exciting and challenging experience. One of the most important aspects of running a business is managing payroll for your employees. 

 

Setting up payroll can be a daunting task, but it is essential to ensure that your employees are paid on time and accurately. In this blog post, we will discuss seven steps to setting up payroll.

1 - Obtain an Employer Identification Number (EIN)

An Employer Identification Number (EIN) is a unique identifier assigned by the Internal Revenue Service (IRS) to businesses for tax purposes.

 

You will need to obtain an EIN before you can start payroll for your small business.

You can apply for an EIN online through the IRS website or by mail. Make sure to have all the necessary information about your business, such as the legal name, address, and business structure, before applying.

2 - Choose a Payroll System

There are several options for payroll systems, including manual systems, software-based systems, and outsourcing to a payroll provider. Manual systems involve calculating payroll by hand and can be time-consuming and prone to errors.

 

Software-based systems can be more efficient, but you will need to purchase or subscribe to the software and may require technical knowledge to set up. 

Outsourcing to a payroll provider can be a convenient option, but it can also be more expensive. Choose a payroll system that best fits your business needs and budget.

3 - Gather Employee Information

To set up payroll, you will need to gather information about your employees, such as their full legal name, social security number, address, and tax withholding information.

 

Make sure to keep this information confidential and secure. You can provide your employees with a W-4 form to fill out, which will provide you with their tax withholding information.

4 - Determine Employee Classification

It is essential to determine whether your employees are classified as employees or independent contractors.

 

Employees receive a W-2 form at the end of the year, while independent contractors receive a 1099 form. 

 

Misclassifying employees can result in penalties and legal consequences. Make sure to consult with an accountant or attorney to determine the correct employee classification.

5 - Calculate Payroll Taxes

As an employer, you are responsible for withholding and paying payroll taxes. These taxes include federal income tax, social security tax, and Medicare tax.

 

You will need to calculate these taxes based on your employees’ pay and tax withholding information. You can use the IRS’s tax tables or a payroll software system to calculate payroll taxes.

6 - Set up Direct Deposit

Direct deposit is a convenient and secure way to pay your employees.

 

 

To set up direct deposit, you will need to gather your employees’ bank account information and obtain authorization to deposit their paychecks directly into their accounts. Make sure to keep this information confidential and secure.

7 - Process Payroll

Once you have all the necessary information, you can process payroll.

 

This involves calculating the net pay, deducting payroll taxes, and issuing paychecks or direct deposit. 

Make sure to double-check your calculations and ensure that all employees are paid accurately and on time.

In conclusion, setting up payroll for small businesses can be a complex process, but it is essential to ensure that your employees are paid accurately and on time. By following these seven steps, you can set up payroll for your small business and ensure that you are in compliance with tax and employment laws.

 

Remember to consult with an accountant or attorney if you have any questions or concerns. Good luck with your small business!

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