According to experts, the average cost of running a basic payroll can range between $25 and $200 per month. However, these fees may vary depending on the company you hire and the nature of your business.
You may be hesitant about learning how to do payroll because of the technical nature of this task. Believe it or not, you can run your healthcare business payroll if you learn the basics about how to pay your employees.
Don’t know where to start? Here are the 5 steps you should follow when setting up your healthcare business payroll.
1. Obtain Your Employees’ Documentation
The first step to run your business payroll is collecting important documentation from your employees. Before you can pay them, you need to ask your employees to submit their W-4s, I-9s, and Direct Deposit forms. Depending on the state you operate, you may need to request from them a Federal and State W-4.
These documents will detail their tax withholding rates. I-9 forms will help you determine if your employee is eligible to work in the United States.
They’ll need to submit supporting evidence of their citizenship such as a copy of their US Passport. Non-citizen employees will have to submit a copy of their Employment Authorization card and Resident ID.
2. Record Your Timesheets
Running an accurate payroll comes down to calculating the hours your employees worked. Keep in mind this only applies to employees you pay per hour.
However, you should also maintain a record of the hours worked by employees who aren’t paid hourly. You want to make sure your employees are meeting their responsibilities and weekly hours.
3. Figure out Your Employees’ Gross Pay
Determining your employees’ gross pay is as easy as multiplying their worked hours by the applicable hourly rate. If the employee worked any overtime, you should also multiply the overtime rate by the overtime hours they worked. Afterward, you should add both results to obtain your employee’s gross pay.
4. Calculate Your Tax Deductions and Net Pay
Before paying your employees, it’s vital to calculate and deduct any applicable tax deductions to obtain your employee’s net pay. Federal unemployment tax, social security, and medicare are some examples of typical tax deductions. If you’re unsure about the applicable deductions, you should consult an accounting professional.
5. Pay Your Employees
After figuring out your employees’ deductions and net pay, it’s time to process your payroll and pay your employees. You may consider using accounting software or a paystub generator such as thepaystubs.com.
Accounting software may process your payroll through direct deposits to your employees. If you choose to do it manually, a paystub generator might be your best option.
Why Learn How to Do Payroll
Hiring a company to run your payroll can put a dent in your business capital. When you outsource these services, you’ll lose control of your accounting operations. If you learn how to do payroll and run it yourself, you’ll be able to put this money toward other business expenses such as marketing and inventory.
You may be hesitant about running your payroll due to the technical aspect of the task. However, you should consider getting accounting software. These platforms can help you with everything from recording your timesheets to processing your direct deposits.
If you’re unsure about how to run your payroll, you should consider consulting an accountant. They can recommend the best payroll platform for your business and help you streamline the process.
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