Running a small business requires you to wear a lot of different hats on a day-to-day basis. In addition to being an entrepreneur, you might have to be a manager, salesperson, and an accountant. Many of the responsibilities you handle may not be your area of expertise, but you get by. However, payroll is one thing that can be very complicated for businessowners who have little experience with it. Luckily, payroll is our area of expertise at America’s Best Payroll (hence our name), and we’re here to tell you some of the key things you should know about it.
- To set up payroll, you need to apply for an EIN. You can think of an employer identification number as a social security number but for businesses. This unique number is assigned specifically to your business, so the IRS can identify you for tax reporting purposes. And as a business located in South Carolina, you also need to register for a withholding account and unemployment tax account through the state before you can set up payroll.
- You need to classify your workers properly. If you classify a worker as an independent contractor when they should be an employee, or vice versa, that could cause problems. Each requires different payroll forms, and improper classification might subject you to penalties.
- Outsourcing your payroll is a good idea. Payroll can be both complicated and time-consuming, and errors are a pain to deal with. When you outsource your payroll, you’ll be able to pay your workers on time without any added stress.