How to do payroll yourself
You might be wondering, Can I do payroll myself ? Will I be more prone to errors ? How much time will it take ?
When you handle payroll on your own, you can either do everything manually or use software. Regardless of which method you choose, you must start by gathering some information.
To run payroll for your employees, you first need information such as :
- Federal Employer Identification Number (FEIN)
- Tax rates (e.g., SUTA tax rate)
- Employee information (e.g., pay rate and withholding information)
Read on to learn about the tasks, clock commitments, and costs involved with doing payroll manually and using software .
1. Manually do calculations
If you ’ ra uncoerced to read up on tax laws and do your own calculations, you might be concerned in learning how to do your own payroll .
Doing payroll by hand is the least expensive payroll option. You don ’ t have to pay a professional or purchase a program .
When you manually run payroll, you have entire command over your payroll. You know when and how your payroll is completed. But, doing payroll yourself probable means you don ’ t have person to check your calculations. There is an increase chance of errors, which are often followed by penalties .
Doing payroll by hand besides takes prison term. You have to do all the calculations, distribute wages, and file taxes. You could spend a fortune of clock time working on payroll rather of working on your commercial enterprise .
How to manually do calculations
wish to handle payroll solo, without any software ? Take a search at the steps you have to follow for manual payroll :
- Track time
- Use an attendance management method to track employee time. Or, you could have employees track their own time. Then, you can approve it.
- Calculate payroll
- At the end of each pay period, use employee time cards and their rates of pay to calculate wages.
- Include all types of compensation, including any tips and overtime for the pay period.
- Subtract deductions
- Begin by subtracting pre-tax deductions.
- Next, deduct employment taxes.
- Finally, withhold post-tax deductions.
- Pay employees
- Distribute take-home pay to employees using your designated method (e.g., direct deposit).
- File and deposit taxes
- File and remit employment taxes according to your deposit schedule and form due dates.
2. Purchase payroll software
Payroll software is a great middle-ground option for doing your own payroll. Online payroll software is relatively cheap. not to mention, the software does all calculations for you, so you don ’ t have to worry about numerical errors .
With payroll software, you remain in control while processing payroll. You get to be in tear, and you know precisely when payroll is done.
Depending on the solution you go with, there might be a determine bend for you to get the bent of the software. But, you can contact customer confirm for help .
Payroll software requires a small time committedness. The time committedness is less than what you would spend on manual calculations. And if you purchase a tax filing service, the software takes concern of all tax obligations for you. You won ’ thymine have to worry about withholding tax, file, and remitting taxes—saving you even more time .
|Interested in using payroll software but not sure if it fits in your budget? Download our FREE (ah, music to the ears) guide, “How Much Does Online Payroll Software Cost?“|
How to use payroll software
If you ’ re concern in learning how to do payroll yourself but besides want a streamlined serve, consider software. here are the steps to use payroll software :
- Purchase reliable payroll software
- Enter your business and employee information
- Have employees track their time worked each pay period
- Run payroll and distribute wages
- The software handles calculations for you.
- File and remit taxes
- If you use full-service payroll software, you can skip this step because the software company will do this for you.
Can you do your own payroll?
You now know how to run your own payroll. If you ’ re hush not sold on being able to handle it on your own, you might opt to outsource payroll to a professional employer organization ( PEO ) or accountant .
Accountants and PEOs are trained professionals who can run payroll for you. After you pass over employee data and time cards, your payroll professional will handle the remainder .
Keep in mind that expertness comes with a cost. Outsourcing payroll is the most expensive out of all your payroll action options .
Do your own payroll with Patriot
- Easy onboarding with our setup wizard
- Free USA-based support
- Run payroll in 3 easy steps
Try It Free for 30 Days
This article has been updated from its original publication date of September 7, 2016 .
This is not intended as legal advice ; for more information, please click here.