Processing Payroll: How to Do Payroll for Your Tech Startup
Are you trying to figure out the best practices for processing payroll? Read this article to learn how to do payroll for your tech startup.
When you’re the owner of your own business, it falls upon your shoulders to do many arduous tasks that you may not have previously been exposed to in the corporate world.
One such task is managing payroll. Not only is this task hard to complete, but it’s also incredibly important. Messing up your employees’ pay is a great way to experience high employee turnover that will skyrocket recruiting costs and over time, kill your operations.
In this article, we’ll help save you from that unfortunate scenario by teaching you how to do payroll. We’ll give you a few of the basic principles of payroll processing so that you’re better equipped to pay your employees correctly and on time.
The first step to processing payroll is to gather documentation. In order to correctly process payroll for your employees, there are certain things that you will need to know about them.
Most of the information that you need to collect will come from the W-4 form . This form contains all of the information regarding how many withholdings the employee is claiming for tax purposes (we’ll discuss how this is relevant later).
Beyond that, you’ll also need to know what benefits the employee has enrolled in. Last but certainly not least, you’ll need their employment letter so that you have documentation regarding the salary or wage that they are supposed to be earning.
Choose Your Payroll Software
The next step is to choose the right payroll software. Thankfully, there are many different payroll software options on the market to help make this painful process a little bit easier.
When choosing payroll software, keep the following things in mind.
First and foremost, you want to think about ease of use. The user interface of the payroll software should be incredibly intuitive. Unless you are a very large business, there is no need for the interface to be very complicated.
If you’re a business owner, chances are that you’re very busy. The last thing that you want is to have to take the time to sit down and learn a payroll software’s ins and outs for hours before you can actually use it. Avoid this by choosing the most beginner-friendly option on the market.
Another important thing to keep in mind is functionality. You’ll want to know whether the software can process withholdings, automate payments, keep financial records, and the like.
Finally, be sure to check out multiple different software options before settling on any specific one. You’ll typically be able to get custom quotes for your business if your company is large enough. Compare these quotes against functionality to ensure that you’re getting maximum bang for your buck.