As a business owner, processing payroll is one of the most important tasks your business faces, but it can also be one of the most cumbersome and time-consuming.
Investing in a payroll processing company is usually the best choice, as there are endless accounting, administrative and tax-related responsibilities involved with payroll processing. In fact, accurate and timely payroll processing requires the handling of delicate information, extreme attention to detail and proper record-keeping. This alone often requires a dedicated employee with experience in human resources, accounting or payroll.
Typically for smaller businesses and startups, it is more lucrative to work with a payroll processor as an employee will not need to be devoted to the singular task of running payroll. This frees up time and resources, allowing all employees to focus on growing business.
How Do I Run Payroll?
For most businesses, no matter the size, payroll involves multiple complex steps:
Gather Employees’ Information.
This step includes gathering all employee information, which can vary by state. This usually includes proof of citizenship, W4, I9, any benefits forms specific to your company, and bank information. It is important to keep this information confidential and appropriately stored.
Determine Payroll Schedule
Determine how often employees need to get paid – weekly, biweekly, or monthly are common options.
Calculate Gross Pay
Gross pay is the number of hours an employee works multiplied by their hourly rate. Salaried employees’ gross pay is simply their annual salary divided by the number of payrolls ran annually. Make sure to include any bonuses or overtime pay. Typically, when working with a payroll provider, this information will be inputted and verified approximately a week to two weeks prior to payday.
Determine Each Individuals' Deductions
Deductions can be tricky for small businesses, as each state is different. Working with a payroll processor ensures proper compliance.
Calculate Employees’ Net Pay
Net pay is the gross pay with deductions removed. This is your employees’ take-home pay. Depending on the company’s and employees’ preferences, this can be paid by check or by direct deposit.
Do I Need a Payroll Processor?
Most companies choose to leverage the benefits of a payroll processor to handle the intricacies associated with running payroll. This reduces the risk of errors and ensures compliance with state and federal law. Additionally, when working with a payroll processor, employees can focus on accomplishing business goals versus focusing on the minutiae of administrative tasks associated with payroll.
Partner with EFX for Your Payroll Processing Needs
If you’re struggling with payroll processing, now may be a good time to consider EFX’s Payroll Solutions. Our intuitive payroll and direct deposit solutions, and simple fee structure are backed by highly responsive customer service and an extensive array of benefits. With EFX, you can save time and money by consolidating all your transactions into one file, uploading it to our platform. Then, let us handle the rest.