What You Need to Know About Small Business Payroll

Starting a small business is exciting. But there's a lot to think about and plan. One of the less glamorous tasks for startups is payroll. There are many ways to approach small business payroll.

Payroll goes beyond wages. There are payroll taxes that need to be addressed. Many small business owners look for the best payroll software services available to help them with this somewhat arduous task.

Payday is exciting for employees but can be a complication for small business owners. And it all starts with payroll taxes.

First, you'll need an employer identification number (EIN) from the IRS. You'll also need to know what types of employees you have and what forms should be filed.

Two basic types receive different tax forms. These affect your small business payroll. Some receive a W-2 Form and those that receive a 1099 Form. Contractor payments are made using a 1099 Form. Full-time or part-time employee hours or salaries are made with the W-2 Form. You'll be withholding IRS and state taxes from your employees' paychecks.

These payroll taxes include income, Medicare, unemployment, Social Security and various state taxes.

Determining employee benefits like health insurance or paid time off will also be necessary. These are part of the payroll process. You don't have to pay contractors' benefits.

You'll also need to decide if you'll be making a direct deposit of wages into your employee's bank account.

Once you have an idea of what you want, you'll need to determine if you're going to keep your payroll system in-house using payroll software or use payroll providers.

If you don't go with a payroll service, you'll need to keep updated on the percentage rates on each withholding tax. You also must be sure to file these taxes and forms on a timely basis. Depending on your payroll amount, it could be quarterly to daily.

A payroll provider can file for you. The best payroll services will work with you or your human resource (HR) department to ensure filings and tax payments are made on time with the correct amount.

There are a lot of payroll services available, but some are at the top of their game, and you might want to consider them.

Gusto is an all-encompassing payroll provider. Gusto will run payroll as often as you want regardless of the pay period, and they have unlimited payroll. They automate tax calculations. A direct deposit to pay employees is not a problem with Gusto. And if you have contract workers, they can make contractor payments. Other HR services are available.

For a small business, their pricing is $36 a month plus $6 per person per month.

ADP has payroll processing with direct deposit and tax filing. ADP also provides onboarding of new hires. In addition, they can give the employees HR forms and documents. ADP has comprehensive HR support. Garnishment payment services are also provided. ADP makes integrations easy with their mobile app.

Pricing is provided with a free quote based on the number of employees and services.

The best payroll services will work with you or your human resource department to ensure filings and tax payments are made on time with the correct amount.

Besides providing integrations with your payroll software, Paychex offers employee self-service. This gives your employees controlled access to their information. In addition, they offer their Paychex Flex essentials program for those business owners with nine or fewer employees.

They also offer a cloud-based time and attendance system called Paychex Flex Time. Other payroll plans are available.

Pricing is available with a free quote based on the number of employees and services.

Onpay's ability to integrate with Quickbooks and Xero makes it a seamless payroll provider. They can handle your onboarding needs and provide HR support. It's user-friendly and economical.

Pricing is $36 per month plus $4 per person per month.

Patriot offers both accounting software and payroll software. It offers a 30-day free trial of unlimited payroll. And it only takes three simple steps to run payroll. Patriot is mobile-friendly and has accounting software integration. It can handle multiple pay rates and will file year-end payroll taxes for no additional fees.

Pricing for their full-service plan is $37 per month plus $4 per person per month.

You can activate payroll with Quickbooks online. They offer many services, including HR support, synced 401(k) plans and more. They'll help you set up your payroll system. Quickbooks payroll integrates with your accounting program. And they have bundle pricing.

Pricing for Quickbooks payroll only is $35 a month plus $4 per person per month.