Remember the feeling of excitement on payday when you had a job?
Now the roles are reversed if you’re the business owner and you have employees. If you’re feeling confused or overwhelmed you’re in the right place.
Keep reading to learn everything you need to know about paying employees.
Your Complete Guide to Paying Employees
When it comes to paying employees there are many things you want to learn beforehand to avoid making any costly mistakes. You don’t want to violate any laws set in place by the Fair Labor and Standards Act (FLSA). You also don’t want to owe the IRS any taxes.
The guide below is to help you get started but it’s not all inclusive. Keep in mind that every state may vary. Make sure to do your due diligence and research all the local laws for your state.
First Things First
Before you can even begin to add any new employees to payroll you need to get an Employer Identification Number (EIN) from the IRS. The application is fairly easy if you do it online and you will have your EIN instantly after.
If your state requires businesses to have ID numbers to process taxes then make sure to have this in order as well.
Gather Your Employees Info
Once you have your business paperwork in place you can begin to gather the information from each employee. You can have each employee fill out a W-4 with their information such as full name, date of birth, address, and social security number.
To stay compliant with regulations you will also have to submit an I-9 form. This is to verify that your employees are eligible to work in the US.
Decide when you will be paying your employees. Will it be weekly, bi-weekly, or monthly? Before making a final decision make sure there is no state requirement where you’re in business.
Keep your employees in mind when making this decision. Your goal should be to take care of your team and keep them happy. Paying them once a month might make it difficult for them when it comes to paying their bills.
Choose whether you will be using old school paper and pen or an online system. Time is usually important in business going the online route might be the smartest. You can learn more about creating paystubs online without any hassle.
When it comes to payday you want a system in place that won’t take you endless hours. You want to be as efficient as possible. Research and choose wisely.
As you can see paying employees doesn’t have to be stressful. Look at it in a positive light that you’re providing another human being a way to live their lives and take care of their families. This is a great accomplishment to being a business owner.
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