Managing payroll for your small business is a sign of growth and success. The key to overcoming complicated payroll functions is developing a smooth-running system that reduces the likelihood of expensive errors. Applying these payroll tips and tricks should make executing and managing your payroll process much easier.
Choose a Robust Payroll Software Solution
Managed payroll for small business requires precision, so it’s best to use a high-quality software package that handles most of the functions for you while safeguarding against potential errors. Examine major payroll software solutions such as QuickBooks Online when you need multiple levels of small business support. Whether you need a solution for simple payroll and tax filing or a more powerful option that includes direct deposit and payments, great accounting software takes much of the burden off your shoulders so you have more time to focus on growing your company.
Take Care of Payroll Tax Payments On Time
Deducting, paying, and reporting payroll taxes properly are vital elements of running a sound business. By following filing requirements and making payments before deadlines, you can avoid potentially expensive penalties, interest, and fines. Setting aside funds weekly, bi-weekly, or monthly for payroll taxes helps you stay in compliance. By putting this type of system into place, you enjoy the peace of mind that comes from knowing you can pay well before the deadline.
Set up a Separate Bank Account Just for Payroll
Monitoring the amount of cash available to pay your business expenses is essential. If the cash to pay all your bills and expenses resides in a single account, monitoring your money becomes more difficult. Because paying employees proves one of the most important parts of your small business, consider establishing a separate bank account exclusively for payroll. A small business payroll checking account gives you an easy way to verify you have the necessary funds to cover your employees’ paycheques. It also makes it easier to track of your routine government tax payments.
Consider Placing Employees on Salaries
Salaries offer more predictability than hourly wages, and they tend to stay steady over time. Hourly wages can vary greatly, particularly when you account for overtime hours. This means that from a payroll standpoint, paying salaries helps you budgets more consistently than paying hourly wages. Putting employees on salaries streamlines the payment process when you manage payroll for small business.
Plan for Payroll-Related Expenses
Now that you have a plan for setting aside the money to cover employees’ salaries, add in other things you need to manage small business payroll. With full-time salaried employees on staff, you need to account for payroll taxes, retirement plan matching contributions, and benefits as part of the total compensation package. Quickbooks small business payroll seamlessly handles these additions as you go, and it also lets you easily remove workers when they leave your employ.
Classify Workers Correctly
Whether you hire employees or self-employed individuals makes a big difference in your payroll and their paycheques. Their employment classifications impact their rights to collect employment insurance and pension benefits, and it also affects their income tax treatment. You pay out less in payroll expenses for independent contractors, but you need to decide on the classification to protect your business and the rights of your workers. If you’re unsure how to classify workers, review the Canade Revenue Agency (CRA) guidelines or request a ruling before you make those classifications.
You depend on your employees to do a great job for you and your customers or clients, and your employees depend on you to compensate them well, in full, and on time. In turn, QuickBooks helps you keep track of your small business’ financial heath so you both have reliable paycheques. Did you know you can pay employees in QuickBooks? Add Payroll today.