Factor Analysis Definition in Business
If you played sports when you were young, then you grew up and entered the workforce already knowing how incredible it feels to be part of a team. As an adult, managing your own team of professionals helps you build positive relationships that help increase productivity, but it also comes with some important responsibilities — payroll being one of the most important of all. It goes without saying that employees won't stay happy and perform at the top of their game for long if they aren't paid correctly and exactly on time, but employee happiness is just the beginning.
Beyond making sure direct deposits hit bank accounts on time, you must make sure every rule is followed and every calculation is correct for deducting payroll taxes that are paid to the IRS. The legal penalties for mishandling payroll deductions can be catastrophic. If your company offers employee benefits like health insurance, those calculations and deductions have to be spot-on as well. Fortunately, plenty of tools are available to help you manage all the complexities of payroll for your small business — without hyperventilating!
Before you can pay your team, you have to set up an accurate system for tracking how many hours and days they worked in a pay period. If you pay them by the hour, then the system must at least include the total number of hours worked. If you pay them by the day, then you need to track how many days they worked and establish a system for partial days, if applicable. If you decide to pay some or all of your employees a salary instead of an hourly wage, then it's up to you to determine the rules for receiving the full salary amount each pay period — will you deduct for missed hours or days, for example — and calculate any applicable adjustments.
For small businesses with only a few employees to track, it may be fairly simple to record this information in simple Excel or Google spreadsheets, but if you have more than a handful of employees, you may want to consider using a time clock to save some time and stress. Time clocks come in a variety of formats, including old-school clocks with punch cards, digital clocks with badges and computer software that requires employees to log in and out.
If employees accumulate days they can take off for illnesses or personal reasons and still get paid, then you will need to keep track of those days as part of your payroll system as well. That's also true for paid vacation time they earn throughout the year. Time clock software like Homebase and TSheets often includes additional helpful features, such as scheduling capabilities and options for managing time off requests. Pricing varies based on the number of users and features, with some basic programs available for free for a limited number of users.
Learn the Rules for Handling Payroll Taxes Correctly
When you pay your team, you're responsible for calculating and paying payroll taxes to the IRS. In the U.S., payroll taxes consist of three main components: federal income taxes, social security taxes and Medicare taxes. The percentages for each type of tax are set, but the execution can get a little tricky. Employees pay the full amount of federal income taxes due out of their paychecks, for example, but the cost of social security and Medicare taxes are split evenly between employers and employees. These two taxes also have special rules at different income levels. On the other other hand, federal and state unemployment taxes are exclusively paid by employers. (Exception: A few states also require employees to pay unemployment taxes.)
If your business only has a few employees, you may feel confident about completing all these calculations and making accurate payments to the IRS, but it's important to understand the importance of accurate reporting. Many different types of payroll services are available to help your company navigate the complexities of paying employees. Whether you decide it's beneficial to hire a permanent accountant to manage your payroll department or you work with an outside payroll service every two weeks to take care of paychecks, it's all about choosing the right payroll solution for your business.
Decide If Do-It-Yourself Payroll Software Is What You Need
Even with a determined attitude, it takes a lot of time to do payroll correctly. If you don't feel confident about doing your payroll without some kind of assistance, you aren't alone. Small mistakes could add up to big losses in both fines and dips in employee confidence and morale. Alternative options for your company range from using a highly-rated, do-it-yourself payroll software solution to adding an accounting professional to your staff or working with payroll companies that offer varying levels of service.
Software solutions like QuickBooks and Gusto integrate with many types of accounting software and offer big perks like allowing you to send tax payments to the IRS from right inside the software. Many programs also include features to manage pre-tax deductions like health insurance premiums and 401(k) retirement plans as well. To get the most bang for your buck, compare features and choose the software that offers the exact features you need for the lowest price. If you plan to use time clock software, make sure the programs you use are compatible for easy exporting of timesheet data straight into the payroll software.
Consider Full-Service Payroll and HR Assistance
If you aren't sold on the idea of payroll software and you want full-service payroll assistance that completely takes the hassle of managing payroll off your plate, then reputable companies like ADP TotalSource and Paychex come highly recommended, but they don't come cheap — at least not for their full-service packages. Depending on the specific plan you choose, some full-service payroll companies also provide HR services like new-hire onboarding and benefit management.
Other companies like Paycor take it even further and provide complete all-in-one HR and payroll solutions. If your company is growing in size but not yet large enough to support its own internal HR department, these services could offer the perfect solution. They are more expensive than payroll software or basic services but much less expensive than hiring full-time HR staff. It's important to fully weigh the benefits against the cost when making your decision.
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Factor Analysis Definition in Business
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