Learn how to set up payroll for your small business
You have set up your own business, great. You’re following your ambition! But Have you ever thought payroll for a small business would be so complex?
Many small business owners are very much astonished to see that it is more than just process the cheques. There are strict procedures and guidelines, complex tax laws need to follow for setting up the payroll.
Take a deep breath and chill. With the proper system and tool in place, the payroll software can actually figure out things really easily and in a very short time for you.
This small piece of article will guide you to set up your payroll as a small business owner and run it like a pro.
How to Set up the process for payroll
We will guide you through the process of setting up the payroll, as a small business owner, understand how best practices work. But we need you to get the information for the followings:
- Options for process the payroll
- Create necessary accounts
- Gathering information for employees
- Creating the Payroll Cycle for the organization
- Choose how will pay to your employee
- Think how will you pay your taxes, as an employer
- Selecting the right to automate payroll service provider
- Running the Payroll
1. Options for process the payroll
Now as a small business owner just imagine who will handle your payroll and how the work needs to be done are the prime decision you need to take. One may think it is easier to do it by self as an initial glimpse, but let me tell you it is extremely hard to maintain and takes a lot of your precious time. You may hire a run it yourself with a small notebook, pen & paper, or even hire an account but it is advisable to choose the right partner(carbonateapp.com) who takes care of entire payroll right from the setup and help you save a lot of time & cost and gives you the data related to an employee for the overtime, under time completely automated and ensuring to monitor the productivity as well.
The options as a small business owner should look at affordability, ease of use for the payroll software. It is very much important to choose the right options for your payroll before finalizing and setting up payroll.
2. Create necessary accounts
As a small business owner, you need to create the necessary accounts for payroll, you will need the following information:
• Employee identification number
• Local or foreigner ID proof numbers wherever required
• Employer registration number while creating your legal entity
• Check the tax payment system to pay the taxes as per your preferred method.
It is better to check this with a financial consultant to see if there are any more additional requirements.
3. Gathering information for employee
As a small business owner, you need to find out the below employee information while setting up payroll.
• Get the staff name, contact number, nationality.
• Check the staff is full time or part-time or a contractor.
• Check the NRIC/FIN number of the staff.
• Find out the pay-out policy for the staff(monthly/weekly)
• Please check if there is any overtime/under time policy for the staff.
• Kindly find out if there is any allowance or sales incentive or claim mentioned for the staff.
• Check if there is any contribution for SHG or any other funding contribution borne by the employee.
Once you have all the information you can and process the payroll for an employee. Please note when you have set up the automated payroll software in place it is really easy to find the records without any hassle
4. Creating the Payroll Cycle for the organization
All of the staff working for your firm eagerly waiting for payday. As a small business owner, you can choose the pay cycle weekly, fortnightly, monthly whichever is suitable for you. Think about the best convenient time for cash outflow for you, as before the payroll you need to calculate the salary for each of the staff before processing.
5. Choose how will pay to your employee:
Well processing the payroll for small business owners is actually the method through which you want to pay your employee.
It may either of the followings:
• Direct fund deposit
• Online fund transfer
Many small business owners prefer online fund transfer as it is really easy and time-saving. But please do keep in mind if anyone does not have any bank account it is easy to give them a cheque or cash.
6. Think how will you pay your taxes, as an employer
As a small business, it is very important that how will pay taxes to the concerned authority as per law. You need to provide the correct gross pay for all of the individual staff working for you and submit the taxes to the government. Payroll software can help you prepare the data you need, and you can submit the form (IRAS) accordingly. As a small business, you need to pay IRAS form yearly, as an annual tax to the concerned authority.
7. Selecting the right to automate payroll service provider
Now as a small business you figure out selecting the right to automated payroll service provider is extremely important. Here are a few steps to guide you the choosing the best service payroll service provider:
• Discover the correct feature: While selecting the correct service provider please plan properly, just search and find out all the needs that can satisfy your payroll requirements. Then with the proper plan search and discover the products that can satisfy all your needs, also allow you to avail extra benefits without adding any cost. Find out the correct software which can also automate your entire payroll process and finally select your preference.
• Figure out the software: Just sign up and try out a with a demo account and ask as many questions as to how to use the software and also figure out internally try out all the options not only by yourself but through your staff as well.
• Estimate the price and benefit: The cost of any payroll software is actually very lower than you can think of, wherein (70%) of it is paid by the government. When you a price quote just check which features are included and what is not included as well. Please understand if you are getting a product at a nominal price does not mean that it is the best for you. Always keep a note that the products which satisfy all your needs and offer great customer service will always offer you the best price. Finally, once it is done you are ready for an exciting journey with the payroll service provider.
8. Running the Payroll
Payroll set up for a small business it really easy once the initial account set up & data migration policy is done with the help of a payroll service provider and provides you with the required details for login access.
Now during the payroll account set up, the payroll service provider will give you a complete understanding of company settings, personal settings, and all the other queries you have.
Then during onboarding as a business owner, you will share the employee records, leave entitlements, the leave applications history, and the payroll files to import the data and make it standardize format and the payroll service provider will import for you.
It is better to take one stride at a time and before you know the overall payroll set up, you’ll be running payroll like a pro.