How to Run Payroll: The Ultimate Guide to Doing Payroll

By Daniel Lewis
Advertiser disclosure

Payroll has traditionally been a huge issue for small to medium-sized businesses. But with the increase in automated software, it has now been streamlined to a large degree – provided you are organized and diligent in your accountancy.

Below, we have outlined how to run payroll in the most succinct way you will ever find. But first, let’s take a look at what payroll processing actually is. 

Payroll Processing in Brief

Payroll processing is the method by which you pay your managers and employees, but also in terms of how you record these entries for tax purposes. Business owners have a lot of flexibility in terms of how they file for taxes. 

Depending on how their legal entity structure and unique situation, they will need to record payroll/accounting differently. As simple as it is, there are many nuances, such as overtime, contributions, overtime, and more.

We have broken it down into 9 essential steps to make payroll processing as clear as it can be.

The 9 Essential Payroll Steps

#1 – EIN

Step one is to find your EIN number. This is an easy and straightforward step. All you have to do is look on one of your tax or legal documents. If you do not have an EIN number, then you can file for one and get a response within minutes. We have created an entire post about the EIN number and how to find it. 

The EIN is your unique identifier as a legal entity. Each business with employees must have an EIN. If you are a sole proprietorship with no employees, you can use your SSN number. But this is the only real case where your SSN can double as a tax number because you are the business. You need to have an existing ITIN or SSN to apply for an EIN.

#2 – Collect Employee Details

Ok, the next step is to gather employee information. You need a system in place for the accurate collection of this information. This is doubly relevant in a world where there are so many freelancers and short-term employees. Get all employees to fill out an I9 and use details to fill out the W4 for them. Get familiar with both of these documents. For freelancers and contractors, you will need to get them to fill out Form W9s. Read over all of these forms if you are a business owner. Even if you are not directly involved in accounting, it’s useful to become familiar with the lingo and how it all fits together.

Essential legal information is contained in these forms with regard to the worker/contractor. Without this data, it is not possible to process payroll! You need to fill out a Form W2 at the end of the year (not to be confused with the Form W4, which is filled out by workers at the commencement of employment). Form W2 is also known as the Wage and Tax Statement. Form W4 is also known as the Employee’s Withholding Allowance Certificate.

Take note of the fact that Form 1099s have a different set of submission criteria in comparison to fixed worker forms. The good news is that all you have to do is submit the forms to workers at the commencement of employment and store them somewhere. To summarize this step:

  1. Give Form W2s to workers
  2. Give Form 1099 to freelancers.
  3. Store all documents in a secure repository.

#3 – Payroll Schedule

How frequently are you going to pay your workers and freelancers? You can pay weekly, bi-weekly, or monthly. In fact, you can pay in any schedule you wish. But bi-weekly and monthly is probably the easiest.

Corporations can often pay their employees monthly, as it makes payroll easier. But small business owners might prefer every 2 weeks, as many people (on lesser salaries) want their payment more frequently. Be sure to check state laws with regard to payroll schedule, and to also check industry standards. 

#4 – Choose a Payment Processing Software

What system are you going to use to pay your employees? What accounting and payroll software are you going to use? There are many systems you could use. Do some research and find out what ones are the best for your business. We recommend the following 5 payroll services to make your life a whole lot easier.

  1. #1 – Gusto: One of the best all-rounded payroll services on the market right now.
  2. #2 – OnPay: Exceptional for small businesses, one service plan, easy to cancel and renew on a month to month basis.
  3. #3 – Patriot: Perhaps the best option for small businesses on a budget, without any significant compromise on functionality.
  4. #4 – Intuit Quickbooks: Often claimed to be the very best by online review sites (but not by us, as it falls short on a couple of categories).
  5. #5 – Square Payroll: Amazing POS technology, integrates with Square products and site-building services, easy to set up, excellent inventory management, very modern and slick design.

All of these payment processors can be programmed to automatically calculate payroll steps, once configured correctly.

#5 – Gross Pay Calculation

Gross pay calculation is straightforward. If you are using a payment processing software, then you can just view the figure, which is updated automatically in real-time. Otherwise, you must merely multiply the hours your employees worked by their hourly rate. Do this for every unique employee, add them all up, and you have the yearly gross pay for all of your employees. Remember to include overtime hours and their special rate. 

#6 – Remove Deductions and Exemptions

This is where most people unfamiliar with business lingo have a large number of misconceptions. Allowances and exemptions are the same things. They are accounted for in the Form W4. Deductions are specified by the employee on the 1040EZ form. This is where things can get a little messy. Cross-reference how each employee fills out their unique tax form so you can ensure that you are making the proper withholdings. Aside from deductions and exemptions, you have to remove the following, depending on which ones are relevant:

  • Local, State, and Federal Taxes
  • Social Security
  • Medicare
  • 401(k) contributions
  • Workers’ compensation contribution
  • Other benefits

Because there are so many permutations on these factors depending on your unique situation and your employees, it would be pointless to give an example. You need to know your local, state, and federal laws, and what your medicare and workers’ compensation obligations are. In many instances, these will depend on what your industry is – taxes and obligations are different depending on whether you are involved in medicine, law, finance, retail, etc.

#7 – Pay Employees

You have done the hard part once all deductions, allowances, and contributions have been deducted in Step 6. You are now left with Net Pay. This is also known as take-home pay. To recap, gross pay is what you are to pay employees before all the deductions and contributions are shaven off.

Create a pay stub for each employee (basically a receipt) and electronically record each payment. Having a good system of storage is a major advantage in the long run. You never know just when you need it. Once you know how much each employee is to be paid in a given period, pay them using their preferred payment method. In the modern age, there are many payment mechanisms beyond traditional bank accounts.

Most businesses tell potential employees how they will be paid at the start of work, and let the employees set up their own account. But it is also useful to supply a couple of different payment options. Payroll can be a large expense for a business, and it is often a trade-off between either the business owner or employee paying the processing fee. However, there are certainly some payment solutions that are friendly to both parties, such as Transferwise and Payoneer.

#8 – Reporting and Filing

Your business may need to pay Federal Unemployment Tax (FUTA), State Unemployment Tax (SUTA), State Unemployment Insurance (SUI), and Federal Insurance Contributions (FICA). Most of these are dependent on your state of operation. FUTA, SUTA, and FICA are explained in more detail here.

There are a lot of online calculators that can enable you to crunch these numbers quite readily. Medicaid and Social Security also have to be paid to the relevant authorities. All new hires have to be reported to the IRS. Federal business taxes are to be paid on a quarterly and annual basis.

#9 – Maintain Records

Recording keeping is essential in terms of payroll and accounting. A good software service should automatically keep files for you so you don’t have to worry. In addition, the service will not only automatically calculate payroll, but can file taxes for you. This is a huge advantage as it eliminates so many hours of manual labor.

In the modern era, it is simply not feasible to maintain so much work on a spreadsheet, even if you are an IT wizard. And if you think you can hire a programmer to do a custom system, remember that you are tied to this programmer – forever. If anything goes wrong, you may have to scrap the entire “system”.

Handling Social Security and Medicare Taxes

Both workers and business owners are expected to pay 6.2% of the total earnings of the employee, up to $137,000. On top of this, a 1.45% Medicare tax is to be paid by both parties.

For self-employed individuals (such as a sole proprietorship without employees), you will have to pay the entire amount. There are two primary deductions you can make, according to the 2020 SSA release:

“First, your net earnings from self-employment are reduced by half the amount of your total Social Security tax. This is similar to the way employees are treated under the tax laws because the employer’s share of the Social Security tax is not considered wages to the employee.”

“Second, you can deduct half of your Social Security tax on IRS Form 1040. But the deduction must be taken from your gross income in determining your adjusted gross income. It cannot be an itemized deduction and must not be listed on your Schedule C”

Handling Workers Compensation Insurance in Payroll

In nearly all states, Workers Compensation Insurance is mandatory. You might have heard about the many kinds of insurances that a business could potentially take out. But the worker’s compensation insurance is the most relevant. It forces employers to ensure that their workplace is safe for workers.

Regardless of who is at fault, the employee can make a claim from this fund if an accident takes place. The statutes determining the specific rules and regulations differ from state to state, so you will have to check with your local authorities. Make sure you include the following in payroll for the purposes of Workers Compensation Insurance:

  • Annuity plans
  • Wages or salaries, including retroactive wages.
  • Commissions and draws against commissions
  • Bonuses including stock bonus plans
  • Davis Bacon wages or wages from a similar wage law
  • Extra pay for overtime work
  • Pay for holidays, vacations, or periods of sickness
  • Payments by an employer of amounts required by law to be paid by employees to statutory insurance/pension plans
  • Payments or allowance for hand tools or power tools used by hand
  • The rental value of an apartment or house provided for an employee
  • The value of lodging, other than apartment or house, received by employees as part of their pay
  • Payments for salary reduction, employee savings plan, retirement, or cafeteria plans that are made through employee-authorized salary reduction from the employee’s gross pay
  • The value of meals received by employees as part of their pay
  • The value of store certificates, merchandise, credits, or any other substitute for money received by employees as part of their pay

Incorrect payroll has a major impact on workers’ compensation premiums, so you have to use the right payroll. Under report payroll and you’ll have a large, nasty audit bill hit you 3 months after the policy expires. Over report payroll, and you drag down your cash flow throughout the year, only getting you money back down the line.

Items to exclude workers’ compensation insurance for payroll purposes include tips and gratuities, work uniform allowances, sick pay by the third party, payments for military service, payments to insurance and pension plans, and employer-provided perks. This can be a complex area, so it might be a good idea to consult an attorney. 

Many payment processors, such as Square, are integrated with insurance providers to easily handle payroll with workers’ compensation included. They recommend Pay As You Go (“PAYG”), a new and easier way for business owners to tackle workers’ compensation insurance.

Running Personal Payroll

The way that the IRS collects taxes depends on your legal entity structure. A Sole Proprietorship is viewed as a single business owner. There is no distinction between the owner and the business. Put another way, the owner is the business. The relevant form is Schedule 1040 (SE) for a Sole Proprietorship with no employees.

For a partnership with employees, each owner will have to fill out their own Form 1040. Partners are not considered employees from a tax perspective so they do not get a salary. Otherwise, it will have implications for the accurate reporting of FUTA and FICA, among other issues.

For both Sole Proprietorships and Partnerships, you should not treat yourself as an employee of the business with an associated salary. If you pay yourself from business income, it is not tax-deductible. So it would end up costing you money. The self-employment tax is about 15%, and it is best to pay this off in advance to avoid a big tax bill at the end of the year.

For S-Corporations and C-Corporations, the situation is a little different. The business owners (‘officers’) are allowed to be treated as employees of the company, drawing a wage and submitting a Form W2. While your wage will be subject to taxes, there are innumerable tax deductions that you can make to reduce your tax liability dramatically. For S-Corporation owners, the salary has to be reasonable, otherwise, the IRS will draft a fine just for you. Payroll is a tax-deductible expense, but distributions are not (for both S-Corporations and C-Corporations).

Finally, we come to the LLC, one of the most common and flexible legal entity types. This structure is governed by the state, and not federal laws. The LLC can opt to be taxed as either a partnership, Sole proprietorship, or S-Corp. By default, single-member LLCs are treated as Sole Proprietorships for tax purposes and multi-member LLCs are treated as partnerships.

What to Look for in a Payroll System Provider

There are a number of critical items to look out for in a payroll system provider. First and foremost, you will be looking for something that caters to both freelancers and fixed workers. So it should handle both Form 1099s and Form W2s. You need it to cater to the number of employees you currently have. The most essential payroll features include:

  • Track employee hours
  • Track employee wages
  • Track deductions and other withholdings
  • Keep tax documents organized
  • Track direct deposits and payments

A “Full Service” payroll will do all of this. In addition, it should automatically file taxes for you. This is such a relief, as it really takes a weight off of your shoulders. It should also handle deposits and withdrawals, withholding and paying garnishments, and new-hire reporting. The ability to fulfill comprehensive HR solutions is beyond the scope of a payroll provider, but it should definitely cater to the onboarding of new employees by furnishing them with the correct documentation to fill out.

Payroll can be a little intimidating at first glance. After hiring a lot of different employees, you need to make sure that you are doing everything correctly. And there is a lot of room for confusion between all of the different legal entity types, different kinds of worker (manager, owner, contractor, employee), state and federal laws, and correct submissions. Social security, medicare, and retirement plans can make the whole thing a lot more complicated.

And this is exactly why payroll providers are so important. They take care of all of this for you, whether you have one employee or one hundred.

Creating Your Own Payroll System – Is It Really Worth It?

As previously mentioned, doing payroll yourself is really quite a silly idea. It is more likely to cost you money in the long run. You can create your own system using Excel spreadsheets and outlook to disseminate the proper forms to new employees and to manually track hours. Once you understand it, it really is not all that complex.

But you need to create a lot of formulas so that everything runs smoothly. You will also need to create a system of automatically filing the documents by the deadlines. With programming experience it can be done – but why would you want to, instead of paying about $30 a month for a system that is intuitive and easy to use, files taxes for you, and with a dedicated customer support team?

If you do intend to create your own system, ensure that you:

  • Gather the preliminary information you need to process payroll
    • Find EIN
    • Establish state as well as local tax identification numbers.
    • Collect employee financial information using W4 and 1099 forms.
  • Set up a payroll schedule
    • Choose a weekly, biweekly, semiweekly, or monthly payroll system.
    • Establish payroll tax payment dates.
  • Set up a proprietary system for employees to input hours worked
    • Get employees and contractors to manually insert hours into excel.
  • Manually process payroll
    • Calculate employee hourly schedules and overtime rates
    • Calculate gross pay for each employee.
    • Determine deductions and subtract from gross pay.
    • Calculate net pay and issue payment.
  • Complete these follow-up tasks after each pay period
    • Keep and document all instances of payroll documents.
    • Report all new hires to the IRS
    • Adjust any mistakes and report them to the IRS.
    • Report FUTA, SUTA, SUI, FICA, Medicare, Social Security, and other relevant information to the appropriate authorities.

Essential Payroll Forms and Documents

The following is a list of the most relevant information for general business owners. While it seems like a lot, you should get familiar with them relatively quickly. Next, you have to create a system for the accurate processing of such documents, en masse, from numerous different employees. The most pertinent payroll documents include:

  • Your Employer Identification Number (EIN)
  • Form W4 and I9 (regular employees).
  • Form 1099 and W9 (freelancers/independent contractors),
  • Form W2 (end of the year to IRS)
  • Schedule C (Sole Proprietorships or single-member LLC)
  • Schedule K (Partnerships, S-Corp or multi-member LLC)
  • Schedule SE (for self-employment taxes, if applicable)

The difference between a form W9 and a 1099 is that a W9 collects information from a contractor while a 1099 records how much is paid to that contractor. So you give the W9 to the contractor at the start to fill out and he returns it to you. The 1099 is used to record how much you paid to that contractor during the tax year.

Both the Form I9 and the Form W4 are given to the employee at the start of employment. The I9 relates to the legal ability of the worker to have an occupation in the United States, and it is governed by the Immigration and Reform Control Act. The W4 relates to the Internal Revenue Service and is also called the “Employee’s Withholding Certificate

Payroll Forms Table for Quick Reference

The following is a quick reference table so you can understand what forms are used to report on certain items. Only the most relevant items for business owners have been included. Pay particular attention to the W2, W4, I9, and 1099, as these are the most relevant for the purpose of paying employees. For personal taxes as a business owner, you need to understand the Form 1040 SE.

W-2, Wage and Tax Statement and W-3, Transmittal of Wage and Tax Statements Report wages, tips, and other compensation, and withheld income, social security, and Medicare taxes for employees.
940, Employer’s Annual Federal Unemployment (FUTA) Tax Return Report and pay FUTA tax if your company either:

Paid wages of $1,500 or more in any calendar quarter during the calendar year (or the preceding calendar year)

Or

Had one or more employees working for your company for at least some part of a day in any 20 different weeks during the calendar year (or the preceding calendar year).

941, Employer’s Quarterly Federal Tax Return

Or

943, Employer’s Annual Federal Tax Return for Agricultural Employees

If you are an employer, you must file a quarterly Form 941 to report:

  • Wages you have paid,
  • Tips your employees have received,
  • Federal income tax you withheld,
  • Both employer’s and employee’s share of social security and Medicare taxes.

After you file your first Form 941, you must file a return each quarter even if you have no taxes to report, unless you are filing a final return or meet one of the exceptions.

944, Employer’s Annual Federal Tax Return This form was designed so the smallest employers (those whose annual liability for Social Security, Medicare, and withheld federal income taxes is $1,000 or less) will file and pay these taxes only once a year instead of every quarter.
1040 or 1040-SR, U.S. Individual Income Tax Return See 1040 or 1040-SR Instructions
Schedule A (1040 or 1040-SR), Itemized Deductions Use Schedule A (Form 1040 or 1040-SR) to figure your itemized deductions. In most cases, your federal income tax will be less if you take the larger of your itemized deductions or your standard deduction.
Schedule C (1040 or 1040-SR), Profit or Loss from Business Report income or loss from a business you operated or a profession you practiced as a sole proprietor. Also, use Schedule C to report wages and expenses you had as a statutory employee.
Schedule F (1040 or 1040-SR), Profit or Loss from Farming Report farm income and expenses. File it with Form 1040 or 1040-SR, 1041, 1065, or 1065-B.
1040-ES, Estimated Tax for Individuals Use this form to pay tax on income that is not subject to withholding (earnings from self-employment, rents, etc.)
1040 or 1040-SR -SE, Self-Employment Tax Use Schedule SE (Form 1040 or 1040-SR) to figure the tax due on net earnings from self-employment.
1096, Annual Summary and Transmittal of U.S. Information Returns Transmit paper Forms 1099, 1098, 5498, and W-2G to the IRS.
3115, Application for Change in Accounting Method File Form 3115 to request a change in either an overall accounting method or the accounting treatment of any item.
4562, Depreciation and Amortization Use Form 4562 to claim a deduction for depreciation or amortization, to make the section 179 election to expense certain property, and to provide information on the business/investment use of cars and other listed property.
8849, Claim for Refund of Excise Taxes. Claim a refund of certain excise taxes

What Are the 5 Major Benefits of a Strong Payroll Accounting System?

If it has not already been made clear, an automated payroll service really trumps doing it manually. To make an even stronger case, the follower are 6 benefits of a payroll accounting system:

  • Legal Compliance – Meet all of the major IRS deadlines automatically to avoid fines and penalties. Quick retrieval of any record that you need to find. The bottom line is that compliance and accounting are pretty boring. Payroll software makes it easy and streamlined for you so you can focus on increasing performance and doing what you enjoy.
  • Business Performance Analysis – Payroll software integrates easily with many other systems, especially accounting software. You can identify trends such as how much you are paying each employee, where bottlenecks tend to ensure, in sum, it can increase your business efficiency by a large margin.
  • Loan Acquisition – If you want to acquire a loan, then a payroll or accounting system can be linked to an online provider like Kababge or Paypal Loanbuilder. A new buyer will really want to see neat document storage and payroll accounting system in place- they really do not want to deal with legacy systems or proprietary solutions when taking over a new business.
  • Sale Of Business Or Partnership – A potential buyer is not going to want to mull over thousands of old documents or understand a novel spreadsheet system of record. They want a reliable payroll system in place with customer support that has a neat file storage system.Easier Tax Deductions And Profitability – Payroll software makes it easy to identify the different kinds of workers and the different kinds of payment types. This ultimately means you know what to do when it comes to tax deductions. There are actually many ways to handle taxes, and payroll software can end up saving you money, despite the monthly cost.

Most Common Ways to Pay Employees

In the modern era, there are many ways to go about paying employees. Certain states will have laws in terms of how you can pay employees, so make sure to check these. The 5 most common ways are described below, along with their advantages and disadvantages. Most businesses will offer at least 2 ways to pay employees. Remember that you need to provide pay stubs for all employees (this is a legal requirement). 

Direct Deposit

Direct deposit is the most common and easiest way to pay employees. The pay automatically goes into the bank account of the employee or freelancer automatically. This is sometimes referred to as an Electronic Funds Transfer (‘EFT’).

It is quick, cheap, and convenient to do direct deposit, which is why most businesses operate this way. The most time-consuming part is the configuration of the direct deposit. Set up fees can also be a little costly.

By Check

The primary advantage of the paycheck is that the employee does not need to share bank details or even have a bank account. They can use a check cashing service for a fee. You can either use handwritten checks or a check printing service.

With a check printing service, you will rack up costs in terms of a high-quality printer and ink. But this is more common than handwriting the checks, which takes a lot of time and blank check paper each month. Paychecks can also get lost or stolen, which is another issue.

Mobile Wallet

Mobile wallets are an increasingly popular way to pay employees. Examples include Venmo or Google pay. It is quick and convenient, and especially useful for freelancers and contractors. Fees are tiny. It might be a little more difficult to keep track of payroll for the purposes of accounting, however. There are less integrations available.

Online Multi-Currency Bank Accounts

Payoneer, Transferwise, and Revolut operate as international online multicurrency bank accounts. They are perfect for international companies that work with a diverse range of workers of various types, in various countries. The way they work is that each individual is given a currency account with associated bank details. And a business will pay money by direct deposit into these accounts. The difference is that the transaction fees are tiny and it is instantaneous.

Payroll Processing in a Nutshell

If you are a business owner, then you can calculate payroll by figuring out the net pay (gross pay minus deductions). This net pay or take-home pay is what you actually pay to employees. Pay this to employees using your chosen payroll mechanism and frequency (direct deposit, most likely), and maintain all records securely using a good system.

It might be a good idea to consult an accountant every now and again, even if you do most of the payroll processing yourself as a small business owner. They will know many strategies to reduce your overall tax burden, which is largely determined by how you calculate and process payroll.

Payroll processing laws might vary a little state by state, so make sure to check with the relevant authorities. Also, check what the standards are within your industry. There is a balance to be found between industry norms, the business owner, and employee preferences.

Payroll Processing: The Bottom Line

Payroll processing is essential for any business, large or small. It is fundamental for accounting and taxation. A good payroll processing system can take care of the entire burden. 

We recommend both getting familiar with payroll processing and taxation in its entirety and also using an online payroll service for accounting, consulting an accountant on a periodic basis. 

This way, you will be completely covered. You have the automation of the software, the specialization of a qualified accountant, and personalized knowledge of the topic.

You will be running a streamlined business without falling foul of the IRS and maximizing your return on investment. If payroll is viewed as a problem, then payroll software is the solution.

FAQ

What Is a Business Wage Garnishment?

There are 6 kinds of business wage garnishment – child support, creditors, bankruptcy orders, student loans, tax levy, and wage assignments. This is a court order that the employer has to comply with. And you cannot terminate the employee to avoid compliance.

Only a portion of the employer earnings can be taken. To process the court or government order, you would withhold a proportion of the employee earnings and send it to the creditor. The garnishment can be challenged, but the whole thing is a pain for the business owner.

Can a Payroll Check Be Handwritten?

Yes, though this is going a little out of fashion right now. Some traditional businesses in law and finance like to write their own personal checks, as it does have a level of old school prestige associated with it. Handwritten checks can be stolen with a forged signature.

Checks are still the main way that businesses pay one another for services (“B2B”), but it is quite rare to pay employees this way. Checks are still used to pay for once-off professional services such as lawyers and business consultants.

What Are the Most Relevant Payroll Forms to Account For?

These forms have already been mentioned above. They are:

  • Form 1099 and W9 (freelancers/independent contractors),
  • Form W4 and I9 (regular employees).
  • Form W2 (end of the year to IRS)
  • Schedule C (Sole Proprietorships or single-member LLC)
  • Schedule K (Partnerships, S-Corp or multi-member LLC)
  • Schedule SE (for self-employment taxes, if applicable)

What is a “Full Service” Payroll Provider?

A full-service payroll provider is typically one that allows for both workers and freelancers, as well as all of the standard tax documentation. A full-service payroll provider goes beyond the basics of payroll calculations. It will handle deposits and withdrawals, withholding and paying garnishments, and new-hire reporting. It will also file federal, state, and local taxes.

The ability to fulfill comprehensive HR solutions is beyond the scope of a payroll provider, and you will often need a separate service. But some services, such as Gusto, do offer HR capabilities on their premium packages. The fields of payroll, accounting, and HR do overlap a little, but few (if any) cater succinctly to all three areas.

For How Long Do I Have to Keep Employee Wage Records?

According to the EEOC page:

“ EEOC Regulations require that employers keep all personnel or employment records for one year. If an employee is involuntarily terminated, his/her personnel records must be retained for one year from the date of termination.

Under ADEA recordkeeping requirements, employers must also keep all payroll records for three years. Additionally, employers must keep on file any employee benefit plan (such as pension and insurance plans) and any written seniority or merit system for the full period the plan or system is in effect and for at least one year after its termination. Under the Fair Labor Standards Act (FLSA) recordkeeping requirements applicable to the EPA, employers must keep payroll records for at least three years. 

Should I Just Hire an Accountant?

There is no longer a real need to hire an accountant. You are “hiring” an online payroll processor that is doing all of the heavy lifting. If you are medium to large-sized businesses, then you may want to have a dedicated accountant. But most businesses can just consultant an attorney on a freelance basis for maximum return on investment.

There is little need for an in-house accountant for businesses with less than 50 employees. It is just not worth it in the modern age with sophisticated software that automates most of the manual tasks.

Daniel Lewis
Daniel Lewis
Daniel Lewis is an MBA accredited investment professional who wants to assist small business owners to gain access to finance. After going through many channels for funding, Lewis has found that getting the first loan right is vitally important for future success.