If you are a business owner who employs hundreds or thousands of people, you don't want the hassle of keeping track of their paychecks by hand. Instead, you probably want to hire a payroll service to cut checks and keep track of employees' tax contributions, payments into 401K accounts, and so forth. Even if you only own a small business, it may be worth it to you to hire a payroll service so that you can ensure you are following all applicable tax laws and have documentation that your employees are being paid on time.
Most payroll services are computerized. Service representatives will issue you software to help them do their jobs. You will have to install this software onto the payroll computer. Simply insert the software CD-ROM and follow the on-screen or written directions. If for some reason you cannot install the software, you can forward information to the payroll service every week by email or fax until the problem is resolved.
Once the software is installed, enter each employee's hours for this pay period into the system. If you have a large number of employees, this task can be time consuming, so you might consider hiring someone to put this information into the system for you.
Next, enter any adjustments to a given employee's pay. Adjustments may occur due to tax changes, giving an employee a raise, or errors from a previous payroll period. After the system is set up, you should enter such changes into it as they occur to minimize errors or confusion. Make sure to forward any changes in an employee's contact information as soon as you are aware of them.
Enter personal, sick, and vacation hours for each employee so that the payroll system can keep track of them. Also note benefits changes such as enrollment in a 401K so that the system will adjust employee's payroll checks accordingly.
Make sure the payroll service has the proper banking information for your company. Double check routing and account numbers, and make sure to notify the service immediately if your banking information changes. Errors in banking numbers can delay direct deposits of employee paychecks.
Finally, discuss courier/mailing options with the payroll service. Make sure the service will mail out employee's checks on specific dates so that they will arrive before payday. You should also make sure the service will mail you copies of all tax filing notices so that you remain in compliance with tax laws.