Updated: Oct 6, 2021
If you're a small business owner, it's important to keep an eye on the costs. One expense that can be difficult to manage is payroll. It may seem like a tedious task, but there are some steps you can take to make sure your employees get paid and your taxes are filed properly.
If you're a small business owner, then chances are that you've got payroll on your mind. It can be hard to understand the ins and outs of this process, but don't worry, we're here to help! Hopefully this guide will help you feel more confident about handling payroll on your own or get a good idea on how to outsource it!
Payroll - What It Is and Why You Should Care
In simple terms - payroll is the compensation a business pays to employees in trade for hours work and/or services provided. In larger companies it is usually managed by the accounting or human resources department but in small companies it falls on the shoulders of the owner.
Hired help can come in the form of employees or subcontractors. Determining if your workers are classified as employees or subcontractors can be difficult. There are 5 factors to consider (which we be discussed in greater detail in a future post). The 5 factors are Control, Tools and equipment, Financial risk, Responsibility for investment and management, Opportunity for profit.
It is important to determine if you have hired an employee or subcontractor as business owner is responsible to remit government taxes on the employees behalf. Making a mistake on this can be very costly.
Available Payroll Options for Small Business Owners
What are the different payroll options available to me as a small business owner?
Not all software is created equal. It is important to choose a software that automatically calculates wages and government remittances. Also for convivence I would choose a software that offers direct deposits as well as automated remittance payments to the government.
Make sure to do your research to determine which software is right for you company but here are a few good options:
How can I make sure that my employees are paid on time?
Most payroll software requires 3 business days to process payments so make sure that this works with your business. If you choose a payroll cut off date a week before the paydate this should not be an issue. It is imperative that payments are made on time as many employees rely on payments and the company has an obligation to pay on the dates agrees.
The Benefits of Outsourcing your Payroll Function
You can save time and money by outsourcing your payroll function
Outsourcing a payroll service to a qualified company will allow you to focus on other aspects of your business
If you do not have the knowledge or expertise, it's best to hire someone who does
Hiring an outsourced payroll company is more affordable than hiring an in-house staff member
An outsourced payroll company is able to provide services that are tailored towards your needs at a fraction of the cost of hiring an in-house staff member
The benefits of outsourcing include increased efficiency, lower costs, and better customer service for businesses with high volume transactions
I hope you found this guide helpful! If you need more information about payroll for your business, or are looking to outsource the process entirely, we're here to help. Get in touch with us and we'll show you how our services can take some of the stress away from running a small business. You deserve it!