Setting up a Payroll System for Your Business

Before you hire your first employee, decide how your payroll work will be handled. Payroll accounting requires accuracy and attention to detail. As outlined in Step 1, your responsibility as an employer creates tasks that must be done accurately and in a timely manner. The number of employees and the complexity of the payroll (number of states, for example) determines who will do the payroll work. Here are some options:

• Accounting Software
  There are several good accounting software applications with payroll options you can buy and use yourself or have an employee operate.
  
  
• Online Payroll Processing
  You might also want to consider using an online payroll processing application.
  
  
• CPA or Payroll Service
  Your local CPA may have a bookkeeper who can do your payroll processing and help you with reports and payments, or you might find a local or online bookkeeper/virtual assistant who can provide this service.

Whoever you choose to do your payroll work, make certain the specific needs of your business are taken into account.

Index: Setting up a Payroll System for Your Business

1. Understanding Your Responsibilities as an Employer
2. Understanding the Types of Employment Taxes
3. Make Decisions on How and When to Pay Employees
4. Decide Who Will Do Your Payroll Work
5. Determine the Paperwork Needed for New Hires
6. Calculate Pay for Hourly and Salaried Employees
7. Create a Payroll Register and Set Aside Payroll Liabilities
8. Provide Payroll Tax Reports to Taxing Authorities
9. Submit Payroll Taxes to Taxing Authorities
10. Set Up a Yearly Payroll Tax Calendar