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For many business professionals, the mere mention of payroll is enough to make their eyes roll back with frustration. Handling payroll is a complex task and a great responsibility. Because of this, many businesses outsource their entire payroll operation, saving themselves from a headache in the process. Whether you hire specialists like us or take on payroll yourself, there are a few ways to help make the execution of processing payroll easier.
Each employee should have a file containing their name, address, birth date, Social Security number, hire date, employee status, means of contact, form I-9, age certificate, and state exemption certificate. Also, create an information sheet containing all of the aforementioned data. Keep it at the front of each employee’s file for easy referencing.
Studies show that the average employee does not know how to properly complete a W-4 form. Because of this, it is imperative that you provide them with instructions in order to minimize mistakes and/or misunderstandings. Be sure to thoroughly review their completed W-4 form before adding the data to their record.
The distinction between employee and independent contractor is often misunderstood. Many business owners favor the independent contractor classification, because they do not have to pay payroll taxes. What many fail to realize is that the IRS has very strict rules about this classification, and the consequences of misclassification can be costly. Make sure you determine your worker’s classification before you start setting up payroll.
The initial set up is the most precarious moment in payroll. One misstep could very well lead to hassle, headache, and hindrance. The best way to avoid any fuss is to collect as much data on your employees as you can from the get-go. This will make the payroll setup considerably easier, which sets the tone for the rest of your payroll experience.
Making payroll easier begins with extensive preparation. Gather every bit of pertinent data on your employees that you can, and store that information in an organized employee record. Top that record off with an information sheet detailing the contents. Make sure that all W-4 forms are properly completed and your employees are correctly classified. Getting the jump on all of this work will make setting up payroll a breeze, whether you are handling the task yourself or tapping a third party to shoulder the responsibility.