For many small businesses, especially those in service provisions such as manufacturing companies or restaurants, tend to be labor-intensive. The cost of their Payroll Singapore is a considerably significant aspect when preparing a profit and loss account. Besides, payroll is more than just giving your employees their wages and salaries. The payroll has to be compliant with any related local or federal laws. Improper administration of payroll duties could result in inaccurate financial reports and paychecks. Thus, the payroll needs to be well budgeted and monitored for progress. Through active management practices, you will be in a better position of managing payrolls.
How to manage payrolls
Manual payroll management
Depending on the number of employees, you can use a manual payroll- for instance, if you have less than ten employees. Although manual inputs are subject to human error and errors of omission, it is a method that gives you control over everything in the business. Thus, you will be responsible in case of any errors.
Hire an accountant
Hiring a new accountant means handing over all responsibilities to him or her. You will have time to focus on other aspects of the business, but there is also a risk of error. Thus, there is not much difference in running a manual payroll.
Using a payroll management software
It is ideal for even the smallest upcoming businesses. The only challenge in question is settling for the best software for a small business. On the brighter side, it takes care of even the little details, easy to operate, fast, accurate, and flexible. The software can also calculate estimated taxes, and it is time-saving. However, some information has to be fed manually.
Steps towards payroll management for a small business
1. Set up a payroll
You will need an EIN- employer identification number to identify your business. There are some questions which will be asked concerning your business. The next step will be registering for an EFTPS account, a free account where you will be paying any federal taxes. The last step will be complying with state-specific registration, which varies from one state to another.
Considerations: As a business owner or manager, you should settle for a consistent pay time, which could be weekly, or monthly. Achieve at duration by consulting your State laws regarding paydays.
2. Collect employee information
After completing setting up your payroll, you will collect information regarding your employees. Your employees will be asked to fill some forms, W-4 fore existing employees and 1-9 for new employees fill out a Form 1-9. Collecting their benefits information, such as health insurance, is also helpful. As an employer, you will know how much to deduct from their paychecks.
3. Choose a payroll system.
Would you like a manual system, payroll software, or would you prefer to outsource the payroll?
4. Calculate employee details
Calculate the hours worked- which is easy when the employee clock in and out. Also, calculate the CTC. Managing payrolls requires one to know which deductions are to be made, and subtracting from the gross pay to get the net salary.
5. File and safely store payroll records.
Payroll records have confidential information regarding your employees. Therefore, these documents should be safely stored.