Payroll, Payroll Taxes, Payroll Software

Every business with employees needs to understand their responsibilities with respect to writing payroll checks, paying payroll taxes, paying workers compensation premiums, filing numerous payroll forms and how payroll software can help them meet those responsibilities.

Payroll starts with employees. What exactly is the IRS definition of an employee? Can I pay my workers as independent contractors and avoid paying the employer matching social security and Medicare payroll taxes? How do employers get an EIN? And what do employers need to know about workers compensation and unemployment taxes?

Once you have employees and begin withholding taxes you create a "trust fund" or debt to the U.S. Treasury and your State Revenue Department. Withholding and payroll taxes are paid to the government in accordance with strict deposit guidelines. Failure to deposit or pay withholding and payroll taxes, or failure to pay timely, may result in severe company and individual penalties.

Once the taxes are paid, monthly, quarterly and annual tax forms are required to be filed. And more penalties apply for late filing of these required employment tax returns.

Sounds overwhelming? Well it really is! That's why it's a good idea to use a payroll software program. Since you probably already have a computer and laser printer you are payroll software enabled. See our page on payroll software and find out what to look for in a payroll software program

We'll try and make payroll, payroll taxes, workers compensation and selecting a payroll software program a little less challenging.

*Assumes a 5.4% credit for unemployment taxes paid to your state.