As a small business owner in Houston, TX, you have a lot on your plate. From keeping track of inventory to managing employees, there’s a lot to juggle. Adding payroll to the mix can seem daunting, but it doesn’t have to be. If you are an S-Corp owner, you may be required to take a W2 salary and run payroll. In this blog post, we’ll walk you through the process of setting up payroll for your small business step-by-step. By the end, you’ll know exactly what you need to do to get started.
1) Determine which payroll system is right for your business.
There are a number of different payroll systems on the market, so it’s important to take the time to research and find one that fits your specific needs. Do you need a system that can handle multiple locations? Do you need advanced time tracking features? Once you’ve determined what features you need, you can narrow down your options and choose the best payroll system for your business.
2) Gather the necessary documentation.
Before you can set up payroll, you’ll need to gather some basic information about your employees. This includes their full name, address, Social Security number, and date of birth. You’ll also need to provide your employer identification number (EIN) and bank account information so that your employees can be paid.
3) Register with the appropriate state agencies.
In order to withhold taxes from your employee’s paychecks, 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. Once you have registered, you will be required to pay unemployment taxes on a quarterly basis.
4) Set up withholding for taxes.
The next step is to determine how much money you will withhold from each employee’s paycheck for federal and state taxes. The amount withheld will depend on the employee’s filing status and number of allowances claimed on their W-4 form. You can use the IRS Withholding Calculator tool to help you determine the correct amount to withhold.
5) Calculate employee pay rates.
Once you have all of the necessary information, you can begin calculating employee pay rates. hourly pay rate x hours worked = gross pay. From there, you will deduct any withholdings (e.g., taxes, health insurance premiums) and calculate net pay (gross pay – deductions = net pay). Keep in mind that there are also other payments that may be required by law, such as overtime or vacation pay.
Setting up payroll for your small business doesn’t have to be complicated or time-consuming—we can help! If you have any questions along the way, don’t hesitate to reach out to us—we’re here to help!