Payroll processing is an essential part of any business. In this article, we will discuss what payroll processing is, steps it entails, and tips for effective payroll processing for your Dallas business.
What is Payroll Processing?
Payroll processing is the entire process of how a business compensates employees. It includes determining payroll scheduling, calculating employee wages, withholding deductions, and delivering payment to employees. Effective payroll processing is critical in order to get your employees their paychecks on schedule, as well as to ensure that your business is not violating any labor or compliance laws or standards.
What is Needed for Payroll Processing?
Ultimately, in order for payroll processing to occur, your business should be aware of the necessary standards and procedures.
First, your business needs to abide by payroll regulations set by the Internal Revenue System (IRS) and the Department of Labor (DOL). These standards include the Fair Labor Standards Act (FLSA), which dictates matters such as minimum wage, full and part-time hourly requirements, and overtime wages, the Federal Unemployment Tax Act (FUTA), which requires employers to contribute to unemployment programs, and the Federal Insurance Contributions Act (FICA), which sets guidelines for Medicare and Social Security benefits.
Next, you need to ensure that you are abiding by state laws with regard to payroll. A CPA can help you to determine what these laws are in your area and figure out a plan for compliance.
Next, you need to apply for an EIN, or an Employer Identification Number. This is the number the government uses to track your business for tax purposes.
Finally, you need to ensure that you have the necessary paperwork from your employees to run their payroll. Some of these documents include W-4s, W-9s, I-9s, bank account information, job application information, and others. Again, a CPA can help you to determine a necessary list of documents and can even help to retrieve these documents from your employees so they are able to receive their compensation.
Automatic vs Manual Payroll Processing
When considering how to execute payroll processing, a business may choose between automatic and manual payroll. Both of these methods have pros and cons, and it is important to understand each before selecting the process your business will operate under.
Automatic payroll processing is often completed through a software program, and many times can make for more organized, efficient, and error-free payroll. Although automatic processing can be more precise than manual processing, it is oftentimes also more costly.
Manual processing can be done by a company accountant or other employee, but that requires prior training. This option is most effective for small to medium-sized businesses, and allows for more customization and attention to outlying details.
How Can Gurian Help Me with Payroll Processing?
Gurian, a small-business CPA in Dallas, offers services such as those listed above to help you with your payroll and other business accounting processes. If your business in Dallas is in need of accounting assistance, contact Gurian today!
