I Just Started My Small Business—Do I Need Payroll Software?
Payday is a moment people look forward to. But for small businesses and startups, it’s a source of stress and frustration.
Why? Payday means payroll—and payroll is complicated and time-consuming. Twenty percent of small business owners spend more than six hours a month on payroll taxes, and some spend more than 10 hours a month.
Luckily, automating payroll makes things easier—especially for new business owners. Here are four reasons to consider getting payroll software when setting up shop.
1. Accurately calculate pay
Paying yourself isn’t as simple as writing a check. Factors like entity type, business plan, and years in operation determine how you pay yourself. There are two main owner payment types:
– Salary: for S or C corporation owners involved in day-to-day operations.
– Owner’s draw: for LLCs, sole proprietorships, and partnerships. This option offers flexibility and isn’t taxed at withdrawal.
2. Avoid dealing with payroll taxes alone
Payroll taxes are burdensome for small business owners. Multiple agencies need payment on different deadlines. Payroll software can handle this complexity and ensure accurate calculations.
3. Stay compliant when hiring contractors and employees
Bringing on contractors and employees requires following numerous rules. A payroll service can:
– Send new hire reports automatically.
– Collect and organize new hire paperwork.
4. Avoid payroll mistakes
Mistakes can have serious consequences, such as penalties and audits. Payroll software helps you:
– Stay current on rules and regulations.
– Pay employees correctly and automatically.
– Keep the right reports on file.
When looking for a small business payroll service, consider the following features:
– Calculating and filing payroll taxes.
– Assisting with new hires and deductions.
– Paying employees and managing records.
– Providing alerts for tax deadlines.
– Preparing tax forms.
– Offering general employee record management.
Remember, payroll software saves time and brings back the joy of payday.
Hello!
I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
My career is built on a foundation of helping individuals and businesses thrive financially in an ever-changing economic landscape. At phonenumber247.com, my aim is to demystify the complex world of finance, providing clear, actionable advice that can help you navigate your financial journey with confidence. Whether it’s personal finance management, investment strategies, or understanding the nuances of market dynamics, I’m here to share insights and tools that can propel you towards your financial goals.
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