Introduction to Payroll

To the small business owners out there, you must be scratching your heads and asking what is Payroll?

Payroll are wages or salaries paid to employees for their service of work for a certain time frame (weekly, bi-weekly, semi-monthly, monthly, etc.) with a total sum amount usually given to them as a check or direct deposit.

There are three things that you need to know in processing payroll:

1. Paying your employees – this involves the calculation of wages/salaries and withholding all the necessary taxes (Federal and state taxes) for the pay period of how much the employee earned.

2. Paying Taxes – the taxes withheld from the employees and the employer portion of the taxes need to be sent to the Federal or State agency on the designated deposit schedule

3. File Tax Forms – Did you know there are forms due every quarter and on an annual basis?  Besides sending in the tax funds to the government, they also want a summary of what you paid so they can reconcile the wages and taxes being reported.

If you can master the three steps for payroll, then you’ll be able to avoid most of the penalties from the IRS.  There are still other rules and regulations that you need to know including Social Securtiy limits and Federal Unemployment limits, these limits may change every year.  You have to keep current with all the publications by the IRS (Employer’s Guide Publication 15).

In the next few days, I will explain each step in depth, so you get an idea of what needs to be done on each payroll. 

Welcome to the Payroll Tips & Advice Blog

Welcome to the Payrolll Tips & Advice Blog!

I created this blog to educate small businesses in understanding the payroll process in the United States.  The process is similar in other countries as well, so you may find some of the information here useful.  I worked in the payroll industry for 6 years now and I’m a Certified Payroll Professional (CPP) since 2005.  I majored in computers in college, but somehow got into the payroll industry as my first full-time position and been stuck here since and loving every minute of it.  I would like to share my knowledge and provide you with some tips especially small business owners on how to process an accurate payroll. 

All the tips and advice posted here gives you a summary of what the payroll process is and how it works; however, you are still responsible to follow all the rules and regulations within the federal, state, city, and local jurisdictions.

If you have any questions or concerns, please feel free to leave a comment on this blog and I will try my best to answer your questions immediately.

Regards,

Certified Payroll Professional (CPP)