Have you got a new startup business? Or perhaps you’ve been in business for a while? The one thing startups and long-term business owners have in common is how much of a hassle payroll can be for them.
Payroll, even if its free payroll, can cause you a headache with all the different things that could go wrong. From employees raising disputes about not being paid for overtime to complaints from the IRS for not filing on time.
Luckily there are some handy tips and tricks to ensure you file your payroll on time and without stress.
Here’s everything you need to know.
1. Always Prepare Early
Don’t leave your payroll or tax returns to the last minute. It doesn’t matter whether it is you, as the business owner, who is preparing them or you have a dedicated accountant. Filing taxes when you’re self-employed is a bit different than filing a standard tax return so having a little professional assistance might not be a bad idea.
Be sure to make it clear to everyone who works for you that you want your payroll and taxes filed early. This way if anything goes wrong then you can make sure you have a time window to fix any issues.
There’s nothing worse than having you or your employees scrambling around at the last minute before payroll is about to go out or an IRS deadline trying to sort out inaccurate figures. Worst still your employees wouldn’t thank you if you had to delay payroll one month by a few days. Your employees have bills to pay as well.
2. Use Free Payroll Software
Long gone are the days where you had to work out payroll by hand or on an Excell spreadsheet. Imagine having to sift through timeslips and income receipts every month to prepare individual payslips.
Thankfully technology is making payroll easier than ever before. Payroll and paystub software is now integrated with many accounting programs. This means you can press a button and your payroll will be worked out automatically.
All employees will now usually have access to an online portal connected to the main payroll software. From here they can see the hours they’ve worked and the hours they are down to work in the future.
They can also access backdated payslips that they can print off in their own time as well as their W-2 forms using a W-2 creator embedded into the system.
Some of this software is even free. If you run a small business this might work for you but those with bigger businesses with a larger number of employees might benefit from paid-for software.
3. Handle Employee Disputes Quickly
When an employee comes to you and claims they have missing hours on their pay stub or they haven’t been allocated the right tax code, sort it out straight away. It can be easy to kick tasks like these into the long grass. Remember 2020 saw the introduction of new rules like the overtime rule so be sure to be on top of this as well.
Tasks like that can be time-consuming and might involve the dispute escalating but having accurate records of the number of hours your employees have worked is important for you as well as for them.
It’s also not good for employee morale for them to feel as if you are ripping them off. Ensure that all employees know that any dispute will be handled properly and swiftly. The last thing you want is a lawsuit from a disgruntled employee.
Make sure you set out what the company policy is towards payroll disputes and tax codes in the staff handbook and ensure your managers state what this is verbal to employers at regular intervals as well.
Ensure that employees feel they won’t be punished for speaking up about disputes with their payroll.
4. Be Transparent With IRS
It was once said that there are two things certain in life death and taxes. Sadly, whatever politicians promise in this election year about reducing taxes, this is always going to be the case.
Don’t try to avoid declaring your taxes to the IRS or reducing them, the IRS is good at finding out about this. Remember, payroll giving is one way of reducing taxes but it can be a hassle. It’s much better to be upfront and honest about what you owe, This is also the best way to avoid an investigation that could hurt your business in the long run.
If you have any issues with payroll then reach out for some expert advice. If you have an accounting or HR department encourage them to get regular training so they are better equipt at handling W-2 employment issues.
There Are Many Great Reasons You Should Use Free Payroll
If you’re a startup business then free payroll is a must for you. It can save you lots of money which might be the difference you breaking even one year.
However, free payroll software doesn’t mean you can take your eye off the ball when it comes to arranging your W-2 employment forms and taxes with the IRS.
To be sure you don’t get investigated and your employees are happy be sure to deal with your payroll early. The last thing you want is to be running around trying to sort out issues on the night before your employees are due to get paid. They won’t thank you if they are paid laid.
Be sure to double-check that all of your employees are on the right tax code to ensure they pay the correct amount of tax and to avoid an investigation. Finally, work with your employees. Encourage them to be transparent about any issues they might have.
This could be anything from disputes about the correct tax code for them on their paystub due to a second job or concerns about pay for overtime.
If you are interested in reading more about free payroll or how to read W-2 forms be sure to check out the rest of our site.
