Setting Up Payroll for an LLC or Corporation
Setting Up Payroll for an LLC or Corporation
Payroll involves far more than just cutting a paycheck to employees. It entails calculating work hours, wages, salaries, benefits, wage garnishments, and withholding and paying employment-related taxes. So, what do business owners need to know about setting up payroll for an LLC or corporation? In today’s post, we’ll cover all of this and more.
Seven Key Steps for Getting Started
The account registrations needed, steps necessary, and forms required to set up and administer payroll are similar regardless of the business entity type.
- Obtain an EIN.
- Apply for State and Local Tax ID Numbers — including a state unemployment tax ID, if required in the state.
- Set up a payroll bank account. Some businesses find it beneficial to use a separate bank account for payroll purposes rather than use their primary business bank account for payroll expenses.
- Decide on a payroll schedule. Common schedules include weekly, bi-weekly, semi-monthly, and monthly. Some states may require specific frequencies under different circumstances.
- Get a workers’ compensation insurance policy.
- Determine what optional employee benefits you’d like to offer and what portion of costs will be deducted from employee paychecks. These benefits may include common benefits such as health insurance, retirement plans, and educational reimbursements.
- Gather the required documentation from employees. This will include a W-4 form to document their filing status and track personal allowances to determine the percentage of payroll taxes to be withheld from their paychecks.
Excerpt by Nellie Akalp
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Sincerely,
Maya Weinreb | Founder & CEO
813-336-1574
