When you set up a small business, chances are that you manage most areas of the company yourself and occasionally call in the help of self-employed individuals for one-off jobs, such as web design, market research or copy. But as you expand and begin to fall behind when it comes to keeping up with demand, chances are that you may start taking on some more permanent employees. Employees can be considered the backbone of any company. They keep things going, allowing you to focus on other areas such as making deals, posing ideas for product or service development. You can also oversee a whole host of different areas that individual employees are working on, meaning that you get a whole lot work done in a whole lot less time. But with employees comes responsibility. While this area is vast (including contracts, holiday pay, sick pay and training to mention just a few), there is one area that you need to focus on in particular: payroll. Any employer or employee will have heard this term flung around every now and then. But what does it actually entail? Here’s everything you need to know about payroll and how to ensure it is carried out effectively.
What is Payroll?
So, the term “payroll” is essentially an umbrella term, covering a whole array of processes pertaining to the payment of your members of staff. There are three main areas of payroll that you need to focus on though: the distribution of paychecks, your employee’s financial records (including information concerning wages or salary), and a record of total earnings for the company. If you only have a few employees, you may be able to take care of this all yourself. However, if you have numerous employees or little free time on your hands, you may want to employ a specialist to take care of this aspect of your business.
Taking Care of Payroll Independently
If you intend to go it alone, you will need a few pieces of wisdom and equipment to hand. First, you need to keep a note of the hours each employee has worked in the pay period, their rate of pay and their tax bracket. This will allow you to total up the full amount that they have earned and then deduct the tax, insurance and pension payments that they are required to contribute. You should give each employee a pay stub each time they are paid. This can form a part of their personal financial records. You should also keep a copy for your own files. These can be produced easily with a check stub maker.
Employing a Payroll Clerk
If you decide to employ a payroll clerk, you need to ensure that you find someone who is competent and reliable. Individuals will not need a degree to carry out this role. However, you should look for someone who is good with numbers, has good timekeeping and organization and preferably previous experience in the industry.
Whether you carry out payroll yourself or employ someone to do it on your behalf, you need to ensure that all staff members are paid on time, and you have a complete record of all of the money that passes between you and your employees.