Here are the 5 steps to setting up payroll for the first time.
1) Get your IRS registration information in order, including your:
- Legal business name
- Deposit schedule, which is sent by the IRS
2) Register with your state agencies
These differ state by state, so make sure you're registered with the right agencies in your state.
3) Get all your employee paperwork together, including:
- Form I-9, which confirms their eligibility to work in the US
- Form W-4, which includes your employee's federal withholding allowances
- Your state's W-4 equivalents, so you know how much to withhold for your employees' state income taxes
4) Pick a payroll schedule
Pick one that's both compliant in your state and works for your business's natural cashflow cadence
5) File new hire reports with your state
Every time you hire a new employee and run payroll, you need to file a new hire report within a short period of time. This notifies your state about the incoming payroll taxes, and, it allows the state to check if that employee needs any garnishments.
You then give all that information to your CPA or payroll provider so they can set it up and start running payroll for your company.
For more payroll basics, check out these resources:
[READ] How to Read a Pay Stub: https://goo.gl/wjNbJe
[READ] Decode Your Employee's Paycheck: https://goo.gl/mwuJHE
[READ] What are Payroll Taxes? https://goo.gl/CYTGc2
[READ] Payroll Terms You Need to Know: https://goo.gl/y2ihMe
[WATCH] How to Calculate a Paycheck for your Employees https://youtu.be/75IK5vEhHHw
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