Payroll Set Up
As a small business owner, you already have a lot to manage, from tracking inventory to overseeing employees. Adding payroll to your list of tasks may feel overwhelming, but it doesn’t have to be. If you’re an S-Corp owner, running payroll and taking a W-2 salary might be a requirement. We are happy to assist you with payroll setup or management for virtually any size company & across any industry or state. We do provide custom support for small & medium size businesses, so feel free to contact us with any types of projects.
Below are the step-by-step process of setting up payroll for your small business. By the end, you’ll know exactly what’s needed to get started.
1) Choose the Right Payroll System
There are many payroll systems available, so it’s important to research and find one that suits your specific needs. Do you operate multiple locations? Do you need advanced features like time tracking? Once you’ve identified the features your business requires, you can narrow down your options and select the best payroll system for you.
2) Gather Employee Information
Before setting up payroll, you’ll need to collect some essential information from your employees. This includes their full name, address, Social Security number, and date of birth. You’ll also need your employer identification number (EIN) and bank account details to facilitate payroll.
3) Register with State Agencies
To withhold taxes from your employees’ paychecks, you must register with the relevant state agencies. For example, if you’re in Texas, you’ll need to register with the Texas Comptroller’s office and obtain a Texas Employer’s Unemployment Tax Number (EUTN). You can register online or by mail, and once registered, you’ll be required to pay unemployment taxes quarterly.
4) Set Up Tax Withholding
The next step is to set up tax withholding for federal and state taxes. The amount withheld depends on the employee’s filing status and the allowances they claim on their W-4 form. The IRS Withholding Calculator tool can help you determine the correct withholding amount for each employee.
5) Calculate Employee Pay
Once you’ve gathered the necessary information, you can start calculating employee pay rates. Use this formula for hourly employees: hourly pay rate × hours worked = gross pay. Then, subtract any withholdings (e.g., taxes, health insurance premiums) to calculate net pay (gross pay – deductions = net pay). Don’t forget to account for additional payments required by law, such as overtime or vacation pay.
Setting up payroll can be complex and time-consuming, but we’re here to help. At MaxTax, we offer comprehensive payroll services, handling everything from setup to ongoing management, ensuring you never miss a payroll tax payment again. Let us take care of your payroll needs—reach out to us today!
Payroll tax preparation
If you already ran payroll & need assistance with your filings, including federal 941 forms or any state forms, just contact us below.
Please contact us for assistance with any of the following:
- Onboarding new employees
- Setup of new payroll system for new/existing business
- Generating W2s, 1099s, etc.
- Integration of payroll systems to company accounting
- Quarterly payroll tax filings
- Workers compensation setup & consulting
- Unemployment insurance
- State Disability Insurance
We gladly service clients in all 50 states and specialize in issues related to multi-state taxation and other complex matters.