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A few helpful tips in getting your business “payroll” ready

November 21, 2013

For new companies or companies that are new to payroll, you will need complete a few mandatory tasks before hiring an employee is an option. Below are some steps that are a necessity before you get to hiring employees.

1) Set up an Employer Identification number or EIN. This EIN (also know as an Employer Tax ID) can be found and applied for online by clicking this linkor by filling out form SS-4.

2) The next step is Record keeping. The IRS requires that you keep copies of all employment records for up to four years per employee. If you do not have a system in place to accommodate this requirement you will need to get one in place. Many businesses are switching to electronic records, but it is very important to have a secure system before this is an option.

3) Withholding taxes are crucial! Each employee must fill out the respective W-4 forms (Federal, State and sometimes city). Which forms may vary pending on City localities so it is best to check with your local government to see if these taxes would apply. These forms determine how much tax is to be withheld from each employee check. At the end of the year you are required to provide W-2 forms to your employees along with copies that will need to be provided to the Federal government.

4) You will need to report new hire forms per employee to the appropriate state government. This is a requirement and will need to be completed before 20 days of being employed. This may differ pending on your state locality so please consult with you state government agency to be in compliance.

5) Make sure to carry Workers’ compensation insurance. This is a requirement. You have a few options out there. You can go through a commercial carrier, choose self-insurance or go through the state workers’ compensation system.

6) Post all required notices. There are various notices that an employer will need to post at the work place for the employees. These forms are to inform the employee of their rights and responsibilities under labor laws. Check federal and state governments to find out exactly what the requirements are for such forms.

Once you set up you company with the above requirements, you will now need to set up a payroll process. There are many options out there to choose from. You can start by checking out our payroll services by going here.

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