Consistent financials and meeting your tax liabilities are some of the benefits of running an accurate payroll. As a startup founder, you may think dealing with your payroll will take too much time. However, not learning how to pay employees can put your startup in trouble sooner or later.
Have you set up your payroll? If not, you should get on it as soon as you can. You may think only experts can handle this task. Yet, you can set up payroll yourself when you follow the best tips to pay your employees.
Don’t know where to start? We’ve got you covered. Here are the best expert tips to run your payroll and pay your employees in no time.
1. Open a Business Account and Use It to Pay Your Employees
Most startup founders make the mistake of paying their employees by using their personal accounts. This practice will turn into a nightmare when you file your business tax returns. It can also put your personal assets at risk of seizure in a legal process since you commingle your funds with your business.
The best practice is opening a business account from the beginning even if your company isn’t making any money. You also should make sure you pay your employees using your business account.
2. Classify Your Employees Accurately
Have you classified your employees? It’s common for startup owners to classify their employees as independent contractors. However, you should make sure your employee meets the requirements of this tax classification.
Believe it or not, tax agencies can deem independent contractors as employees when startups bring them onboard. If that happens, you may be on the hook for costly fines and penalties.
3. Set Up and Maintain Accurate Accounting Records
Opening a business account isn’t enough if you don’t maintain accurate accounting records. You may consider buying accounting software to set up and maintain your accounting records.
If you don’t know where to start, you should consider hiring a bookkeeper or accountant. An accounting expert can help you set up your accounting operations.
4. Consider Hiring a Payroll Service
If setting up payroll sounds intimidating or makes you nervous, you should consider hiring a payroll service. When you use a payroll outsourcing service, the company will take care of everything from running your payroll to filing any necessary paperwork. The cost of this service will depend on your location, the nature of your business and the number of employees.
So You Learned the Best Expert Tips on How to Pay Employees, Now What?
Learning the best expert tips on how to pay employees is the first step to get your accounting housekeeping done. However, it’s vital to develop your plan to tackle your accounting operations. While you may be able to do it on your own, you should consider hiring an accounting expert.
Search online for local accountants experienced in helping startups. Make sure to survey their website and focus on the services provided. Can their team meet your accounting needs?
You should also check their online reviews from prior customers. Customer experiences can provide insight into what to expect. It may be easier to ignore your responsibilities as a startup owner, but you should prioritize maintaining accurate accounting books for long-term business growth.
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