54% of people that are in the workforce complain about problems with the payroll department. It's essential that as an employer, you do what you can to ensure your staff is paid correctly and on time. But, if you're not entirely sure about payroll software or the payroll process, you've come to the right place. Below you're going to find the top 5 payroll questions and their answers.
The EIN is the number for all employee's tax filings, both state and federal. The IRS gives this number, and if an employee doesn't have one, all they have to do is request one via the IRS website.
When you built your business, you had to obtain the business EIN to ensure that filing your business taxes go smoothly each year.
Each year people have to pay taxes on their gross income. Once you generate a paystub, there should be a spot that details the amount of money taken from the employee's check to go towards their taxes. This is also known as withholdings.
The money that is withheld goes directly to the state department of revenue and the IRS. If an employee doesn't fill out their w-4 form properly, the right amount of taxes won't be withheld. Thereby leaving them with a larger tax bill at the end of the year.
If you find that you don't have time to run payroll by yourself, it's best to hire someone within the company. Or, perhaps outsource the department. A payroll company can do all the tasks that a normal payroll department would do.
Outsourcing your payroll department will save you money and time in the long run.
A w-2 is the form that employees need to file their taxes. This form will detail the total amount of money they earn over the year.
As well as, what deductions were made to their federal and state taxes and their retirement funds. The employee will use the w-2 form to determine if they owe the government any money.
As an employer, you need to ensure you file and send all employee w-2 forms to employees before January 31st of the year after the tax year.
As a business, it's essential for employees to set aside funds in separate accounts like insurance and retirement. Third-party liability is when you take a portion of workers' checks to be held for company benefits.
When employees fill out their w-4 forms, they can select whether they want specific benefits. They can also select which insurance plan they want to use. Each payroll period, a percentage of their check will then go towards the insurance premiums and other things the employee wants to allocate money to.
We understand that these payroll questions are just a few of the ones that you may have. However, as a business owner, you need to know what a w-2 is, when to file it, and how you can outsource your department altogether.
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