Ask This When Setting Up a Payroll System for Your Business

Understanding exactly how to set up a payroll system is part of practicing good business. You have to prepare well ahead of time, especially if you have a large company. As a business professional, identify at least 5 questions you should ask yourself about the payroll process.

5 Comments

  1. AskThisWhen on June 23, 2015 at 7:24 pm

    Should I choose manual or automatic payroll software?

    You are strongly encouraged to use payroll software. Many tools have automatic features that allow you to make employee profiles, input numerical data and add up complex calculations. Manual software has gone out of style in recent years. You can use automatic tools to save as much time as possible. A very large company does not have the time to handle complex math calculations by hand. If you run a small company or work as a freelancer, you can choose a manual payroll system. Doing work manually is more affordable for the starting professional. Working manually is also a good way to oversee every detail of your work and check for accuracy.

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  2. AskThisWhen on June 23, 2015 at 7:25 pm

    Are all types of workers paid the same way?

    Know whether your business hires employees or independent contractors because they are paid differently. The two jobs are not the same, so the tax regulations are different. An independent contractor has more control over his or her schedule and payments. When you hire an employee, you usually deduct Medicare and Social Security taxes from the paychecks. However, an independent contractor is required to file tax forms that include these deductions. If you do your payroll checks manually or automatically, distinguish between different types of workers.

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  3. AskThisWhen on June 23, 2015 at 7:25 pm

    Do I have to maintain payroll records?

    In some states, a business has to maintain financial records for certain lengths of time. Know that it will take some explaining to get through a tax audit without this important financial data. Many businesses store their information electronically instead of on paper. Employers have to keep certain tax items, such as W-2s and W-4 forms.

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  4. AskThisWhen on June 23, 2015 at 7:25 pm

    Should I outsource my payroll system or choose in house?

    Outsourcing is an easier way of doing business. You get your payroll work done by a third party, so you pay more affordable prices. Have the option to work with a person or company located overseas. Choose the types of individuals you want to work with and check their backgrounds beforehand. Outsourcing your payroll department is not a bad option for a company that needs to save time and money. If your company is growing and you cannot keep up with the demands, you need an outsourced staff. If you can keep up with the demands and you want to hire people face to face, you want an in-house payroll department.

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  5. AskThisWhen on June 23, 2015 at 7:26 pm

    Do I have to report payroll taxes?

    Nearly all employers are required to mail tax forms to their workers and submit reports to the IRS. You are required to send these reports on certain dates every year. The IRS has guides that help employers file taxes on the state and federal level.

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