Have you set up a new business or expanded your business? Are you hiring many employees and now want to automate the process for their payrolls? Do not worry, there is help at hand. Technology comes to the rescue with customized software solutions that help set up your payroll processing system.
Here is how it works -
Payroll processing essentially involves taking into account the basic pay and other prerequisites that are payable to the employee. Then apply all taxes mandated by the federal and state governments at various levels. To this, add contributions to be made by employer and employee, to employee benefit and welfare funds, insurance and other benefits. Apply all deductions such as leave without pay, salary advances, loan installments deductible by employer and so on. Finally, calculate the net amount payable to the employee. Generate an easy and simple spreadsheet with these calculations that will help the reader understand the process. In short, this is payroll processing. Now, let us look at how this is done for numerous employees.
Obtain a software solution that is robust and flexible, and can be scaled up to a reasonably large number of employees. It should have the ability to accept odd-values, multiple pay scales, and multiple employee categories as well as support variations in pay within these categories. Bear in mind that this software should generally be compatible with your existing computer systems and operating software, to reduce hardships and ensure accurate functioning of the system. You can ask a certified public accountant (CPA) or your local Internal Revenue Service office for recommendations. There are many online solutions as well.
The software solution must have capabilities for calculating tax implications across various state and federal territories. You should be able to re-program it to consider revised rates of taxes and also be able to change values for deductions. Actually, a solution provider who provides software updates, which contain changes in law and tax systems from time to time, will definitely be a better choice. Also important is the ability to generate forms for withholding taxes, payroll information, returns, and to render easy access to records during audit.
For your optimum benefit and depending on your requirements (this is definitely dependent on the number of employees), choose software that performs any or all of the functions mentioned above. For those opting for lesser services, they could always avail the remaining services through human assistance.
Besides installing required technology and software solutions, every employer is required to obtain certain clearances, approvals and identity numbers from the government. Depending on nature of the business, this could include both state and federal government clearances and identification.
It is best advised to consult a CPA or tax advisor while selecting a payroll processing system. They can ably guide you with all legal formalities and requirements. Once you have ensured they are all in place, using an automatic payroll processing software solution should be relatively easy.