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Two minutes of Fanbank small business advice: Get to know Payroll Software
Payroll software is technology that automates employee payments and the subsequent filing of employee taxes. Such software often keeps track of employee hours, while automatically calculating wages, withholdings, and deductions. The software may also handle tasks like making direct deposits or printing checks, plus voiding payments and generating reports and tax forms.
No matter how many employees a business has, payroll software can be a real time-saver. Time saved isn't the only benefit to using payroll software, however, as the software can also help reduce any typing or calculation errors that may occur when manually handling payroll duties. In many cases, an employer needs only to input employee wage information and working hours and the software will handle the rest.
When seeking out software to automate payroll tasks, businesses have several options. Depending on a business' needs, this may mean downloading a free program with limited features or paying a considerable fee for a more robust option with all the bells and whistles. The final option, if a business prefers, is outsourcing their payroll management to an outside company that runs payroll software offsite.
A Professional Employer Organization (PEO) is one type of outsourcing organization that can provide a wide range of services including help for your business to pay taxes, run payroll, provide benefits, and maintain workers’ comp insurance. These PEO’s are considered co-employers because your employees will be listed under the PEO for tax purposes.
If your small business has employees, then congratulations! You are part of the backbone of the American economy and if you’re adding employees, it’s probably a sign that your business is doing well.
But one thing that has been a challenge for many small businesses is withholding the right amount of federal income tax from your workers’ paychecks.
Good news for you is that the Internal Revenue Service (IRS) recently launched a new spreadsheet-based tool to help you calculate appropriate with-holdings. It’s a downloadable “assistant” they call the Income Tax Withholding Assistant for Employers.
The tool also helps employers transition to the redesigned withholding system which went into effect on Jan. 1st (2020).
You can access and download the tool into EXCEL by following this link: https://www.irs.gov/businesses/small-businesses-self-employed/income-tax-withholding-assistant-for-employers