You just quit your job to start your own company, but you need some help. So you decide to hire some employees, and your company grows quickly.
At this point, you know you need help running payroll, but you can’t afford to hire another full-time employee. Luckily, you can outsource to payroll tax services so that you can focus on other aspects of your business.
Keep reading to learn more about how payroll tax services can help you.
Set Up Identification
If you’re starting your company, odds are you don’t have an Employer Identification Number (EIN). But you’ll need this number when looking at payroll tax services.
The IRS uses your EIN to track the income and taxes for your company. While you can use your social security number as a sole proprietor, that can get confusing.
You can get an EIN online or by applying through the mail. Once you get an EIN, you’ll use that number to help with payroll tax services and other financial tasks.
Determine Employees Classifications
Your next step before you can hire payroll services is to classify your employees. The most basic classification is an employee, and you can pay these workers per hour or give them a salary.
Either way, these workers will need to fill out a W-4 form when you hire them. That way, you have their social security number and payment information.
If you want to hire contract workers, you will use a W-9 form to get their tax information. You can pay contractors per hour or project, and you won’t have to worry about withholding taxes from their pay.
This distinction is important because you’ll need your payroll company to run payroll correctly. The more payroll tax help you can give, the better.
Outline Your Payroll Schedule
Next, you need to figure out how often to pay your employees. You can pay them on a schedule of your choice, but you may need to follow state or local laws.
Common payroll schedules include monthly, bi-weekly, and twice monthly. Consider what schedule fits your needs best so that you can communicate that to your payroll tax services company.
Monthly is easy because you can always pay at the beginning or end of the month. Bi-weekly is good if you want to keep payments to a consistent day. But twice-monthly payments can be a good compromise between the other options.
Hire a Payroll Service Company
While you can run payroll yourself or hire someone to do it, you may want to hire a payroll service company. You can find a company in your area, such as this payroll service company for California.
However, you can also look at companies around the country. Whether you want to meet with them in person or via video chat, you should consider what a company offers.
Think about your budget and how many employees you have. Then, you can look for the best payroll services for your business.
The Best Payroll Tax Services
Outsourcing payroll tax services can be a great option for small businesses. As your company grows, you need to pay your team, but you may not want to hire a payroll manager.
Luckily, by preparing your documents and setting a schedule, you can hire a payroll tax service to do the rest.
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