Many payroll products offer integrations with time-tracking apps or include time-tracking features, sometimes at an additional cost. As a business owner, you’re responsible for making sure your payroll is accurate, but that doesn’t mean you need to manage all aspects of the process business budget yourself. In fact, 45% of small businesses use a payroll service, according to a 2021 report by the National Small Business Association. Stop spending time worrying about payroll and start spending time growing your business. GMS is more than just another payroll management company – we’re a PEO that provides comprehensive HR solutions to solve your payroll and other administrative issues. You might be personally liable for payment of payroll taxes, even if you hire someone else to manage it for you.

Most, but not all, small business owners need to get an EIN before they can apply for licenses, file payroll taxes or even open a bank account. Depending on where your business is based, you may need to get a state-level EIN on top of your federal EIN. The next step is to calculate net pay by taking the gross pay amount and subtracting deductions. For small business owners, managing payroll and tax filings can be one of the most time-consuming and challenging tasks there is. GMS can save you time and give you peace of mind through expert payroll management services. Whether you decide to pay your employee  biweekly, semimonthly, or on a completely different cadence, you’ll need to set up a  pay schedule.

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It even includes an integrated time clock and timekeeping system that eliminates double-time entry. The only way to know if you’ve set everything up correctly is to put your payroll plan in motion. Practice processing your first payroll, including calculating withholdings, deductions, and benefits like overtime pay. If everything looks good to go, you’re ready to run your first payroll. The Internal Revenue Service requires businesses to keep employment tax records for at least four years and the U.S. Department of Labor requires companies to keep payroll tax data for at least three years.

The Benefits Of Partnering With GMS For Payroll Administration

You’ll also need information from them related to employee health insurance and retirement savings if applicable. If you plan to offer direct deposit, collect your employee’s banking information as well. Before running your first payroll, it’s important to establish a standard payroll policy. Contributions to Social Security and Medicare taxes (known as Federal Insurance Contributions Act, or FICA, taxes) are paid by both the employee and the employer. That means you’ll also need to pay the employer portion of FICA payroll taxes to match your employees’ contributions. If you’ve received court orders for wage garnishments, consider using payroll software with garnishment management services to stay in compliance and avoid penalties.

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It’s not the kind of business responsibility you want to get wrong. That’s why small business owners must have a clear understanding of payroll prior to hiring where does the cost of goods sold go on the income statement chron com their first employee. Absolutely, we’d be happy to provide you with a demo of our managed payroll product. A live demonstration will allow you to explore the features, functionality, and user interface of our platform.

1. Simply enter payroll online, import hours and wages, or utilize our integrated time keeping system.
2. That means you’ll also need to pay the employer portion of FICA payroll taxes to match your employees’ contributions.
3. Square PayrollPlans start at $35 per month (base) and $5 per person per month.
4. Access to client data is protected by two-factor authentication and restricted based on roles designed for segregation of duties and need-to-know access control principles.
5. First, schedule a call to learn more about our payroll platform and Managed Payroll services.

(In some states, tips count toward hourly pay.) Look for errors in withholdings or deductions, calculated hours and total pay for the period. Payroll software will generally flag some potential inaccuracies automatically, but other mistakes may be subtle and harder to catch. You first need to determine an employee’s gross pay or total earnings for the period before any deductions are made. Gross pay includes salary or hourly wages, tips, commissions, overtime pay, bonuses, shift differentials, vacation pay, sick pay and holiday pay.

However, if employees hand you a printed form, you’ll need to manually update the records. For most small business owners, doing payroll is one of the most confusing, tedious and time-consuming business activities—but it’s also one of the most necessary ones! Problems can lower employee morale, tie up crucial company resources and run even the most successful business into the ground. Review employee pay rates and look into anything that is higher or lower than expected. Check overtime hours and tips, operating expense definition especially for employees who work shifts.

Find help articles, video tutorials, and connect with other businesses in our online community. According to the American Payroll Association, roughly 40% of small businesses incur an average of $845 in IRS penalties each year. Turn your data into business results with robust HR analytics tools. Attract and retain your people with recruiting, performance management, goals, and recognition. Manage life events, and open enrollment in an intuitive and unified platform.

Our team will also keep your business up-to-date with the complex tax filing requirements as they inevitably change and complicate your payroll processes. GMS’ online payroll software, GMS Connect, makes running payroll simple. Our online technology streamlines the payroll process to create less paperwork and give users access from anywhere with an internet connection.