So you’re a small business and just hired two new people to work with you and help run the company.
You’ve never had to pay anyone before, but you don’t have the extra money to hire someone to manage your employee salaries and the payroll. So you’ve opted to do it yourself.
Since you’ve never had to pay anyone before, you probably are not sure how to go about managing payroll. To help you out, we’ve compiled a small guide to DIY payroll to help you out.
- Set Your Business Up as an Employer
Before you can pay anyone, you need to be recognized as an employer by the government. You will need:
- a bank account solely for payroll
- to purchase worker’s compensation insurance
Once you finish these steps, you are on your way to doing payroll on your own!
- Have Employees Fill Out a W-4
Each one of your new hires will need to fill out a W-4 to keep track of their allowances and payroll taxes. Depending on their dependents or allowances, taxes will be different for each employee.
- Choose a Payroll Schedule
To stay on top of paying your employees, you will need to set a payroll schedule. Your employees should know when they will be paid. This could be weekly, bimonthly, or monthly depending on what you choose.
Whichever schedule you choose, you need to stick with it. To make it easier on you, all of your employees should follow the same schedule.
- Pay Your Employees with a Paystub
Once you choose the payroll schedule for your employees, it’s time to actually pay them! This is much more complicated than handing them a wad of cash or sending them a Venmo.
You will need to create paystubs that are documented for your business.
If this sounds too complicated to you to do yourself, you can use a paystub creator. A paystub maker can make the calculations for their final payment based on their salary, any taxes, and any other deductions they may have from their paycheck.
- File Your Taxes
After you pay your employees, you’re not quite done with the payroll process. You need to file your taxes to stay organized for tax season.
You’ll want to send in your employer’s federal tax return and any state or local returns if those are applicable.
A great way to keep track of this is to keep a tax filing system in your office or on your computer to make your taxes easier.
Now You Can Try Out a DIY Payroll System
It can be pretty daunting to start your own business, hire employees, and then start paying them. By following these tips, you should know how to do payroll yourself.
With a DIY payroll, you’ll be saving money to put toward other aspects of your business down the line!
If you enjoyed reading these tips, check out some of our other blogs for more tips and inspiration!