Guide to Payroll Solutions for New Business Owners

If you’re a new business owner, you’re likely juggling multiple tasks at once, from managing finances to hiring staff while trying to grow your business. Our guide to payroll solutions for new business owners is here to help you navigate one of your biggest challenges—managing payroll.

Payroll is more than just handing out paychecks, there’s a lot that goes on behind the scenes. From compliance and regulations, tax filings and calculations, employee benefits, and deductions, there’s a lot to manage.  

In this blog, we’ll provide you with tips that will help you choose the right payroll software and service for your business and streamline your payroll operations.

1. Understanding the Payroll Solutions

Payroll might seem overwhelming at first, but understanding the basics can make it manageable and help streamline your business operations. Paying employees involves several key steps, including calculating employee wages, withholding taxes, and disbursing payments. Each of these steps is crucial to ensuring that your employees are paid accurately and on time.

Let’s break down each of these steps:

• Employee wages: This involves determining how much each employee should be paid based on their salary or hourly rate, overtime, bonuses, and any deductions.

• Withholding taxes: You are responsible for withholding federal, state, and local payroll taxes from your employees’ paychecks. This includes income taxes, Social Security, and Medicare contributions.

• Disbursing payments: Once wages and taxes are calculated, the next step is to pay your employees, which can be done through direct deposit, checks, or pay cards.

You must remain compliant with state and federal laws, which is essential for payroll management. Payroll mistakes can lead to penalties, unhappy employees, and even legal issues, so getting it right is important.

2. Payroll Solutions for Small Business Owners

Choosing the right payroll software can be a game-changer for both employees and business owners, as technology plays a vital role in the successful management of HR and the employee journey. Some of the key benefits of this include automating calculations, reducing errors, and saving time.

Employees are an organization’s most important asset, so it’s important that your software provides great employee experience. When your workforce is unhappy with their interactions at work, you run the risk of low productivity, a lack of belonging and an increase in turnover.

According to a recent survey, 91% of small business owners say providing better employee experiences is a top priority for their business. Employees want to be empowered with self-service and HR teams need solutions that are comprehensive, agile and scalable. The right software can check all these boxes for you and your business.

Every business is unique, so you must choose software that provides exceptional value and offers scalable solutions tailored to your specific HR and payroll needs. With dozens of payroll vendors in the marketplace today, shopping can quickly feel overwhelming.

Start by identifying the key areas where your business needs support, whether it’s payroll, timekeeping, or other HR functions.

We recommend you consider the following features:

• User-friendly: Look for software that is easy to navigate, even if you’re not tech-savvy.

• Integration with other business tools: The software should integrate with your accounting, HR, tax filing and timekeeping to simplify data management.

• Compliance with tax regulations: Ensure the software is updated regularly to comply with federal, state, and local tax laws.

Some popular options for new business owners include isolved and QuickBooks payroll. These platforms offer a variety of features designed to meet the needs of small businesses.

3. Navigating Payroll Taxes

Payroll taxes are a significant part of your responsibilities as a business owner. These taxes include federal, state, and local taxes, along with contributions to social security and Medicare.

The IRS issues hundreds of new tax regulations annually, making compliance a complex and ongoing challenge for you as a business owner. Therefore, maintaining up-to-date knowledge of tax laws and ensuring precise payroll processing is crucial to avoid costly repercussions and maintain smooth operations.

In the case of unpaid taxes, the average penalty for new businesses can range up to $850 per year and it could potentially rise if it is not paid. Robust payroll software can assist with automated tax payments by calculating taxes and filing tax reports.

Professional payroll service providers use similar technology that can help keep you in compliance with overtime wages, PTO accrual tracking and recordkeeping, workers’ compensation, unemployment taxes, social security, and more.

4. The Role of Payroll Services

Unlike payroll software, which you manage yourself, payroll service providers can handle the entire process for you. Many new business owners outsource their payroll and HR needs to a third-party payroll provider. Payroll providers can help you handle all payroll-related tasks including wage calculation, tax filing services, remaining compliant with ever-changing law updates, and managing direct deposits.

Payroll service providers have human capital solutions that allow you to effortlessly process your payroll in one place, ensure timely and accurate pay, compliance, and enhance the employee experience—every time.

Some of the biggest benefits of outsourcing payroll include:

• Cut payroll costs

• Decrease processing timeline

• Maintain regulatory compliance

• Ensure timely and accurate pay for your employees

• Grow and streamline operations

When choosing a provider, we recommend assessing your business needs, evaluating service levels and costs, and considering the reliability and customer support of the provider. Flexible solutions ensure that you can handle seasonal workforce fluctuations and varying demands without compromising service.

By partnering with a company that prioritizes scalability and flexibility, you can confidently navigate growth and change, ensuring continued success and operational excellence.

5. Streamlining Your Payroll Process

Complex payroll, scattered data, and manual, paper-based systems increase the likelihood of costly payroll errors that impact both your employee experience and bottom line. An efficient and streamlined process is going to be key to managing payroll effectively.

Here are some tips to streamline your payroll:

• Regularly updating employee information: Ensure that employee records are up to date with the latest details on salaries, deductions and tax information.

• Ensuring accurate time tracking: Use reliable timekeeping tools to ensure that all hours worked are accurately recorded and paid.

• Pay frequency: Set up a consistent payroll schedule that aligns with your business’s cash flow and employees’ expectations.

Outsourcing your payroll to a third-party payroll provider with great services and software can contribute to a smoother process by automating tasks and providing expert support. It is also important to regularly monitor your payroll software to ensure that as your business grows and evolves, your software can seamlessly adapt to these changes.

Conclusion

In conclusion, starting a business can be stressful, but with the right tools and knowledge, you can handle your payroll efficiently and effectively. HireLevel can support you with your payroll services needs by providing tailored solutions that fit your business size and industry.

With over 29 years of experience, our expert payroll team can help your business ensure compliance with employment laws, self-service payroll systems for employees, and provide you with ongoing consultive HR support to address any issues promptly.

Schedule a meeting with HireLevel today to discuss your payroll and HR needs and discover how we can help you streamline your processes and achieve your goals.

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