3 Ways To Keep Your Payroll In Order As A Small Business Owner

If you are a small business owner, here are a few tip that will help you keep your payroll in order.

#1 Pay Wages & Taxes At The Same Time

When you make your payroll payment to your employees of their wages, make sure that you also pay the state and federal government at the same time. You should be withholding both Medicare and Social Security at the federal level as well as the federal unemployment fund. You are also going to have to pay state specific taxes as well. Holding these out and paying them at the same time you pay your worker's wage is the best way to ensure that you don't get behind on your payroll taxes and end up with a big bill and fees at the end of the year.

Making state and federal tax payments at the same time you do payroll every month will help you budget properly for all of your expenses and will help ensure that you are in compliance and don't rack up a big tax bill.

#2 Make Sure That Your Workers Are Classified Properly

Second, you need to make sure that your workers are classified properly. You want to make sure that you don't incorrectly have anyone as a wage worker when they should be a salary work, or that you are not paying someone as an independent contractor when they should be classified as an employee.

You can review IRS information on this topic to make sure that you are classifying all of your employees correctly, or you can work with a payroll specialist to review all of the classifications of your employees as well as their duties to make sure that everyone is properly classified. If they are incorrectly classified, you may not be paying enough payroll taxes and may be in trouble with the IRS if they audit your company.

#3 Give Raises In Different Forms

When you give raises to employees, consider doing it in ways that will not increase your tax burden but will benefit for your employees. For example, you can offer additional insurance coverage, such as dental and vision, or offer to pick up a larger percentage of their health care costs. You could add perks to the job, such as a free cell phone that they can use for business and personal reasons, a free computer or tablet that can be used for business or pleasure or even a company car to drive to and from work. You could also include a retirement plan and increased contributes to this plan as a way to give raises to your employees over time. These types of raises are great way to ensure that your employees really benefit from the extra money that you spend on them. Just double check with your tax specialist or contact an accounting firm about their taxable status.