How to Start Payroll – What Must Small Businesses Do?

How to Start Payroll – What Must Small Businesses Do?

April 15, 2024By admin

One of the first steps in setting up payroll for your small business is understanding the relevant laws and regulations. Compliance with federal, state, and local payroll laws is crucial to avoid penalties and legal issues. 

Begin by obtaining an Employer Identification Number (EIN) from the IRS, which is essential for tax filings and reporting. Additionally, familiarize yourself with the Fair Labor Standards Act (FLSA), which governs minimum wage, overtime pay, recordkeeping, and youth employment standards. Stay informed about state-specific requirements, such as tax rates, unemployment insurance, and workers’ compensation.

How to Start Payroll with a Trusted Platform

Choosing a reliable payroll platform is key to managing payroll efficiently. A trusted platform like Brabo Payroll can streamline the entire process, from recording employee hours to calculating wages and handling tax withholdings.

By implementing Brabo Payroll, you can transform the way you manage your workforce. Recording employee hours is a breeze with Brabo Payroll, which can automatically calculate wages based on employee hours, handle different pay rates for overtime, holidays, and night shifts, and generate comprehensive reports on attendance patterns. Brabo Payroll also offers biometric systems like fingerprint or facial recognition for secure identification, ensuring data integrity and confidentiality.

Clearly defined payroll policies ensure consistency and transparency in how employees are paid. Establish policies for pay periods, payment methods, overtime, and deductions. Ensure these policies comply with legal requirements and communicate them to your employees. This helps prevent misunderstandings and ensures everyone is aware of their rights and obligations.

Maintain Accuracy with Records

Accurate record-keeping is vital for payroll management. Maintain detailed records of employee hours, wages, tax withholdings, and benefits. 

This not only helps in compliance with legal requirements but also aids in resolving any discrepancies that may arise. Brabo Payroll offers the capability to access attendance records in real-time, which helps maintain accuracy and provides a clear audit trail.

Stay Informed Regarding New Laws and Regulatory Changes

Payroll laws and regulations are subject to change. Staying informed about new laws and regulatory updates is essential to ensure ongoing compliance. Subscribe to updates from the IRS and your state tax agency, and consider joining professional organizations that provide resources and updates on payroll legislation. Regularly review and update your payroll policies and systems to reflect any changes in the law.

Managing payroll can be complex, but all of these ongoing tasks can be put in the hands of an experienced payroll company so businesses can focus on growth. By leveraging the expertise of payroll companies for small businesses, like Brabo Payroll, you can avoid common payroll mistakes and ensure compliance with all relevant laws. 

As a local payroll company, Brabo Payroll provides tailored solutions that meet the unique needs of small businesses. This allows you to unlock the full potential of your business. Say goodbye to inefficiencies, errors, and compliance headaches with Brabo Payroll.

Reach out to us today.