A short guide to setting up payroll for small businesses

A short guide to setting up payroll for small businesses

Running a small business is fun until you get to the finances of it. So, irrespective of if you have one employee or 20, having a payroll helps streamline the finances of a small business to a certain extent. It will also save you the harsh penalties of the IRS and help fulfill your legal responsibilities towards your employees. So, if you are planning on starting a payroll for your small business, here’s how:

Apply for an Employer Identification Number (EIN)

Before you even start building a payroll for the small business, you need to obtain an EIN. This is a rather simple process. You can apply for your EIN online on the IRS website. Use the EIN number to file taxes.

Learn all about the department of labor for your state and its rules

Different states in the country have different laws regarding labor. So, you must take into account both the Federal and State laws before you start creating payroll for any small business. If you have any doubts, get in touch with an accountant or a lawyer who works with labor laws.

Set up your payroll schedule

To keep the inflow and outflow of cash for your small business steady, decide on a schedule for employee payments. You can opt for biweekly, weekly, semimonthly, or bimonthly.

Apply for the state’s withholding and unemployment insurance accounts

Depending on the state, you need to apply and withhold state income taxes and pay them into an unemployment insurance fund. Once you’ve figured out what tax accounts are needed, you have to apply for them online.

Write the employee handbook

Before you get down to the hiring process, you need to have a handbook in place. Write down the rules, regulations, compensation, and more regarding employees. Get it vetted by a lawyer to confirm.

Hire your employees

Done creating all the right accounts and filing all the right papers? Time to hire your first employee. Ensure they fill out all the paperwork as required.

Implement a running payroll system

Finally, you get down to implementing a running payroll system for your small business. For most small businesses, it makes sense to opt for an online payroll system rather than getting an accountant on board. But, how do you know which ones are the best?

Online software that help setting up payrolls for small businesses

We know that having an online software is better for small businesses, but there are some who give limited services while there are others who will even help you file your taxes and streamline your payroll system.

  • Intuit
    Intuit comes with a wide spectrum of payroll packages which makes it amazing for small businesses. They are America’s #1 payroll service.
  • Gusto
    It will immediately file your local, state, and even federal taxes for you. It also comes with the added benefit of integrating with your accounting system.
  • Namely
    The prices for this software are undisclosed. They come with a complete suite that contains both accounting and HR tools. It also comes with health, life, and disability insurance.
  • Sage
    Another application that has loads of payroll packages that are priced based on your business.

Recent Articles

Popular Products

  • • Smartphones
  • • Watches
  • • Garments
  • • Beauty
  • • Lifestyle

LINYI FLY Cell Phone Tripod Stand w/ Bluetooth Remote Smartphone For Iphone in Black, Size 15.31 H x 3.66 W x 2.52 D in | Wayfair LINYI FLY1a8e079


SLEI Universal Mobile Smartphone Cell Phone Stand Compatible w/ XS XS Max XR X 8 8+ 7 7+ SE 6S 6+ 6 5S Samsung Galaxy S10 S9 S8 Adjustable Tablet Stand D


Macally Universal Car Vent Phone Holder Mount w/ 360° Rotatability & a Metal Spring Loaded Clip for iPhone XS XS MAX XR X 8 Plus, Samsung S9 S9 Pl


Nike Accessories | Nike Arm Band Armband Smartphone Case Running | Color: Black/Red | Size: Os


Apple Watch SE 40mm GPS + Cellular (Silver Aluminum Case with Deep Navy Sport Loop)


Samsung Galaxy Watch4 BT (44mm) - Silver


#1 LIMITED EDITION - Invicta Jason Taylor Quartz Mens Watch - 56mm Stainless Steel Case Stainless Steel Band Black (33994)


Invicta Coalition Forces Men's Watch - 54.5mm Camouflage (35476)


American Apparel 2 Pack Tee Fuchsia L


Dickies Women's Short Sleeve Heavyweight T-Shirt - Orange Size XL (FS450)


Levi's Girls' Long Sleeve Graphic T-Shirt Black/Purple S


Satin Beauty Pillowcase, Better Hair In Your Sleep, Queen - Champagne


Vanity Fair Bras: Beauty Back Full-Coverage Bra 75345, Women's, Size: 38 C, Med Beige


Womens Vanity Fair Beauty Back Strapless Full Figure Underwire Bra 74380, Women's, Size: 40 B, Lt Brown


Wacoal Women's Bras TOAST - Toast Basic Beauty Spacer Underwire T-Shirt Bra - Plus Too


Women's Lifestyle Seamless Rib 7/8 Tights - Green


Women's Lifestyle Pocket 7/8 Tight Pants - Pink


Women's Lifestyle Pocket 7/8 Tights - Black


Men's adidas 6-pk. ClimaLite Crew Performance SocksMen's adidas 6-pack Climalite Crew Performance Socks, Size: 6-12, Blue