If you’re running a business, there’s a good chance 20% to 30% of your revenue is going to payroll expenses. While that might seem like a lot, having active payroll expenses means having active employees which is a good thing.
The hardest part of payroll is usually getting started managing it appropriately, particularly as a small business owner.
To help you through that process, our team has put together 5 business payroll tips you can lean on to distribute capital effectively, affordably, and legally. Keep reading to lay your payroll woes to rest!
1. Know What You Can Afford
Payroll can spiral out of control if you don’t watch it carefully. That spiraling is largely due to taxes and fees that ride on your employee’s paychecks.
Remember, you’re usually required to match your employee’s medicare and social security with holdings. You may also have to pay payroll taxes depending on your state.
Keep those riders in mind as you set salaries/hourly rates for workers to make sure you don’t accidentally spend yourself into the red.
2. Lean on Automation
Automation is the number one technological advancement that should be on your radar as a small business owner. It can single-handedly bring down your payroll expenses and streamline the process of carrying out your payroll processes.
For example, this paycheck stub generator can keep you from needing to hire a temp to create and distribute documentation saving you time and money. That’s one of several automated solutions you can adopt to help your payroll run on autopilot.
3. Be Mindful of Your Payroll Schedule
Employees generally like to have their cash-in-hand as soon as possible. As a business owner, that’s rarely the most effective way to manage your payroll schedule.
The longer you hold onto your monthly payroll, the more interest you’ll be able to accrue on that money which is cash in your pocket. Furthermore, the less often you distribute employee pay, the fewer fees you’ll incur if you’re using a software or service to help you execute payouts.
4. Know the Law
Laws concerning payroll are tricky and ever-changing. What’s worse is that laws vary from state to state.
To keep yourself out of legal trouble, consult with a lawyer or HR professional when setting up your business payroll. A little bit of experienced oversight can go a long way when avoiding problems.
5. Hire a Payroll Services Provider
If your head is spinning reading about the ins and outs of managing payroll, you’re not alone. The good news is that forgoing feelings of stress when it comes to payroll is as easy as hiring a company to manage it on your behalf.
Several payroll service providers will take care of everything from managing employee W2’s to getting people paid on time.
Sure, bringing on providers will cost your company money. The peace of mind you’ll get in exchange though may be invaluable.
Business Payroll Doesn’t Have to Be a Pain
Whether you choose to DIY manage your business payroll or seek the help of automated or professional services, you’ve got options when it comes to keeping your organization on task.
We hope our team has helped open your eyes to the possibilities. For more insight on small business payroll and more, consider diving deeper into our content pool.
