Payroll is a mandatory part of any business operation. Many small businesses struggle with the task of keeping track of their employees’ payroll information, especially when that employee is not a full-time employee. When tax time comes around, many small businesses find themselves in a bind because they either have underestimated their taxes or have paid their payroll late. As always, keeping that in mind, these seven easy-to-understand payroll tips will make your life much easier over tax time.
The first of these seven payroll tips concerns Medicare and Social Security benefits. Both are important for small businesses, but what you may not know is that both Medicare and SSI benefits can be claimed on your payroll even if an employee has not been receiving coverage in the past. This is important to remember because both programs have different requirements. Medicare eligibility depends on being a resident of the United States while SSI requires proof of citizenship. So, depending on the status of your employees, make sure you check both programs. If you do not cover Medicare or SSI, your employees may be able to claim benefits for either program.
Another of these payroll tips for small businesses is to keep records of your employees’ incomes. While you may think this is a complicated process, it really isn’t if you have an idea of what your company’s income tax structure is. Income tax laws vary among businesses, so you will want to keep up with the latest regulations by talking with a local, state or federal office.
Most small business owners also forget to report foreign earned income. This is another one of the most common payroll tips for small business owners. Every country has different tax rules, so it’s important to understand which countries you must report to and when. The easiest way to do this is to ask your accountant for help so you can follow instructions to filing your business taxes.
Perhaps the most overlooked of these payroll tips for small businesses is the need to use the right employee data entry software. Most companies simply use computers without any specialized software, and as a result, they are very inefficient in processing data entry requests, which can lead to missed opportunities. Your business may be missing out on as much as a billion dollars worth of potential revenue if you don’t take the time to invest in some employee data entry software.
Payroll is a very important part of running a business, but there are so many things that go into managing it. It’s easy to get overwhelmed, and even if you aren’t, you should consider hiring a payroll management consultant to make sure everything is in order. You should definitely keep these small business payroll tips in mind during this challenging time. The best payroll advice for the small business owner is to focus on one thing at a time and leave the big stuff to a professional.