Encourage your employees to complete a new W-4 whenever their situation changes, like if they get married or have a child.
Each employee will have to complete your state’s version of a W-4 so you can properly withhold state income tax.
o Add new employees to your payroll system.
Once you’ve collected your new employee’s address, social security number, and withholding allowances, add the new employee to your payroll system.
o File a new hire reporting form with your state.
For each new employee, you’ll have to complete and file a new hire reporting form with your state’s Department of Labor. You’ll often have to complete these forms within 20 days of hiring your new employee, but check with your state.
o Keep track of how many hours your employees have worked.
If you pay your employees hourly, you’ll have to make sure you’re tracking their hours each pay period.
At the end of each pay period, make sure to make any necessary adjustments and keep track of any personal time off (PTO) your employee has used.
o Give yourself plenty of time to process payroll.
Make sure to give yourself a couple of days to process payroll. This gives you time to print a report before printing paychecks or finalizing payroll to ensure everything is correct or to make adjustments.
If you’re running automatic deposit, find out how far in advance you must run payroll to ensure it lands in your employees’ bank accounts on payday.
If you’re printing physical paychecks, print them in advance to ensure the information is correct and to give yourself some time in case something goes wrong, like your printer not responding.
o Print paychecks (or initiate direct deposit) and print paystubs.
o Print payroll registers.
Print a payroll register to show your employees’ gross and net wages, including withholdings and deductions. Keep this information in a confidential and secure area.
o Know your payroll tax obligations.
As an employer, you’re responsible for reporting and depositing your employees’ federal income tax and the employee and employer shares of social security and Medicare taxes.
To report these taxes, you’ll either file quarterly, using Form 941 or annually, using Form 944. You’ll also have to deposit the funds withheld, either monthly or semi-weekly.