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Thread: Small business owners: How do you get your payroll ran? Pay your payroll taxes?

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    Default Small business owners: How do you get your payroll ran? Pay your payroll taxes?

    To business owners: I have a question, how do you have your payroll ran? Small businesses with employees as little in number as 1, have to have their employees information collect for taxation reasons -- like for their W'4's and I-9's to file with the appropriate authorities to confirm their ability to work with you as an employee, and confirm the amounts of money that are supposed to be withheld from their wages to be payed to the correct authorities for taxation reasons. Payroll taxes have to be paid quarterly. Reports on those taxes have to be filed quarterly as well. Payroll taxes include State Income taxes, Federal Income taxes, Medicare taxes, and Social Security taxes. They may also have to be reported on annually I think or believe. I have a lot of questions about payroll taxes, so I thought I'd list a bunch of them --and hopefully get as many answers to them as anyone on here is willing to answer.

    1. How do you run your payroll?
    2. Do you use an outside service?
    3. Do it yourself?
    4. Pay an accountant?
    5. A combination of all three?
    6. How much do you pay to outsource your accounting for payroll if you do?
    7. How long does it take the service provider to do?
    8. How do you transition the information to them?
    9. Add people to your payroll?
    10. Take people off your payroll?
    11. Collect your W-4's and keep them on record for your employees?
    12. Your I-9's.
    13. Pay quarterly taxes for yourself?
    14. Your business?
    15. Your employees?
    16. Do you have actual checks cut?
    17. How do you have them cut?
    18. How do you deliver your checks for your employees to them?
    19. How do you have your employees receive direct deposits?
    Last edited by Justin Jared; 02-22-2020 at 03:52 AM.

  2. #2
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    Hi Justin - Good for you for asking this question. Most business owners think payroll is easy and anyone can do it. Payroll can be one of your biggest expense and can cost you a lot in penalties and interest if you don't get it done correctly. I have answered your questions below:

    1. How do you run your payroll? I don't have payroll, but have worked for an accounting firm and now own my own business. Most of the clients I have worked with outsource payroll.

    2. Do you use an outside service? Most of the clients I have do use an outside service.

    3. Do it yourself? Some of my clients have attempted to do payroll by themself, until they missed a tax payment, or didn't have the time to process the payroll.

    4. Pay an accountant? My clients at the accounting firm paid the accounting firm to process payroll, but the firm assigned the payroll to bookkeepers and not the accountants. Bookkeepers hourly rates are less than accountants hourly rates.

    5. A combination of all three? See answers above.

    6. How much do you pay to outsource your accounting for payroll if you do? Prices vary per company. Some will give you a free trial. There is a base fee, per employee fee, plus additional fees per features needed.

    7. How long does it take the service provider to do? Again that varys with the provider and what you need. Some providers need two days to process a direct deposit payroll, others need four days. If you need checks delivered to your location you need to allow time for that.

    8. How do you transition the information to them? Everything is done online now. They will communicate with you by email and you will send what they need through their secure servers.

    9. Add people to your payroll? You will need the employee to fill out lots of forms, personal information, W4 (Fed & State), and I-9, authorization forms for any deductions, etc. A payroll provider, depending on the level of service you sign up with will let you know what you need to get from the employee.

    10. Take people off your payroll? If you are doing it yourself, it can be as simple as not paying them anymore. If you use a service provider, depending on the level of service, either inactivate the employee or notify the provider of the termination.

    11. Collect your W-4's and keep them on record for your employees? you cannot pay an employee until they have submitted a W4 (at least you shouldn't) because you don't know how much to withhold. Yes, keep copies of all W4s either in paper or digital form.

    12. Your I-9's. You should never pay an employee until this has been provided to you with the proper documentation to prove they are eligible to work in the US. Make copies of the ID they provide. Keep this in a separate file from their employment file.

    13. Pay quarterly taxes for yourself? You can pay them yourself if you are comfortable enough with payroll to do it. Depending on the payroll provider and the level of service they may do it for you. You will have to register with each taxing authority for an account. The Federal and most state require payments to be made electronically. A lot of local taxing authorities (cities and counties) do not offer e-file or e-pay, those have to be done on paper forms with a check. Crazy in this age!

    13. Pay quarterly taxes for yourself? Yes, if you qualify.

    14. Your business? Yes, if you qualify.

    15. Your employees? Their quarterly taxes are paid through payroll.

    16. Do you have actual checks cut? Yes, for employees who do not use direct deposit.

    17. How do you have them cut? If you are manually doing payroll, you can hand write the check, or type the check (does anyone still have a typewriter?), or print them from the payroll program you are using. Some programs will print on blank check stock (additional program for check printing is reguired) or on pre-printed check stock.

    18. How do you deliver your checks for your employees to them? Employees can come pick them up at a specified time, or you can mail them.

    19. How do you have your employees receive direct deposits? With direct deposit, payment is automatically deposited into the employees bank account. Employee needs to sign an authorization form first. They should also give you a voided check or something from the bank showing the routing number and account number.

    I hope this has answered your questions, but I'm sure you may have more. Good luck!

  3. #3

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    Still trying to figure this all out so what I'm saying might be wrong and might change.

    I run payroll completely by myself using Quickbooks payroll service.

    I haven't really added people to payroll (except me) but I'm assuming I'd just create a new employee in quickbooks, collect their w4, report new hire to state edd, and then start using the software to pay them. I have yet to remove anyone from payroll so IDK.

    I store government forms in the employee's folder in a filing cabinet and also on my server.

    For quarterly (it's actually probably monthly or it will switch to monthly after you pay a certain amount so be careful with quarterly or you'll wind up with penalties) payroll taxes, I have been just logging into the state edd and irs payments website and making the deposits along with the appropriate forms. Apparently quickbooks payroll can take care of all that for you but i'm still trying to get that set up and used.

    I'm still using checks but would like to switch to direct deposit hopefully soon. Right now I just have quickbooks printable checks so when i do payroll i just shove one of the checks in the printer and print it out and hand it to myself to deposit in my personal bank acct.

    Hope that helps. Ultimately I think there is no "right answer" or "best way" to go about doing this stuff. You just need to mess around and try things and do your research and figure out a process that works well with your business and your team.

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    "Apparently quickbooks payroll can take care of all that for you but i'm still trying to get that set up and used."

    You would need to register with QuickBooks for E-file and E-pay. They will tell you what you need to send them and they will set it up with the federal and state. I don't think they do any locals. Once it is set up, then you would do everything within QuickBooks. I've done it both ways and it's much easier and quicker to do it all within the program than logging into different websites to file and pay. Depending on your payroll plan, you may have to initiate the filing and payment, but is really is so much easier.

    "I'm still using checks but would like to switch to direct deposit hopefully soon"

    It's pretty easy to sign up for direct deposit, but you would have to process the payroll at least 2 days before the pay date. You would need to have the funds available to be withdrawn from your account two days before. If you don't have a cash flow problem, direct deposit really is the easiest way to process payroll, especially once you have employees.

    "You just need to mess around and try things"

    I have to disagree with this. Messing around and trying things is a sure way to "mess" things up which could cause penalties and interest, not to mention upset employees if their pay checks are wrong.

  5. #5

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    The IRS requires that all payroll tax deposits be made electronically, using the EFTPS online system. You cannot mail deposits using a deposit coupon; they don't exist anymore. Go to the EFTPS website. You register and then use the website to pay your taxes; the amounts are deducted from your business bank account.

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