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About

Everyone loves payday—except, that is, the payroll administrator, that's were we come in.

 

Paying employees (as well as contractors and freelancers) is the most complex element of small business accounting. It's also the scariest. Not only do you have to produce checks and direct deposits that are 100 percent accurate, but you also have to make certain that the underlying calculations—taxes, benefits, and other withholding—are also correct down to the penny. Furthermore, you have to submit taxes and filings to the IRS and other tax agencies.

Precision Is Paramount

If you're still doing your company's payroll manually, you're well aware of how complex, exacting, and deadline-driven this process is. Your employees count on you to dispatch their paychecks and authorize direct deposits on scheduled paydays. They expect you to know how much to withhold for all the taxes you owe and the benefits you offer.

There’s an enormous amount of detail to track, especially if you're trying to do it all on paper. Mistakes aren't tolerated well by anyone involved. Tax agencies can assess stiff fines if payroll filings and taxes aren't received by the scheduled dates. Benefits providers can cut off services like health insurance if you fall behind on payments.

How do I pay both employees and contractors?

Paying employees and paying independent contractors are pretty similar processes, but there are some key differences you need to know about as an employer.

In general, paying contractors is a lot simpler than paying employees. The thing is, the IRS considers all workers to be employees unless you can prove otherwise. And if you misclassify your workers, you could pay major penalties.

So before you do anything, take a moment to ensure you know which of your workers are actually employees and which are contractors.

For site Bill.jpg
Bill Brooks, Founder,
Managing Director and Surfer Dude. 

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