A “small business” may sound like it has a simple definition, but it can vary widely. According to the United States Small Business Association (SBA), a small business may be as large as 1,500 employees with $40 million in annual revenue. Of course, this depends on the type of business you operate, as well as various other factors, laws, and regulations.
According to a US Census Bureau report from 2018, 54% of all businesses in the United States had five or fewer employees. This article will dive into how to do payroll for a small business, as well as what to consider when a business begins to grow and it’s time to hire a freelance payroll specialist.
Payroll: The Basics
Everyone knows that ensuring your employees get paid in a timely manner is incredibly important. Luckily, basic payroll for small businesses with only a few employees can be easy, and if your employees are freelancers, there may not even be taxes involved. Here are some basic steps that should be taken if your company only works with freelancers responsible for paying their own taxes:
- Making sure the hours and projects worked by the employees are correct
- Ensuring that each employee’s hours or projects work match the dollar amounts to be paid
- Sending out payments via bank transfer or another preferred method
- Providing employees with a pay statement so they can see they were paid for the correct number of hours
Payroll for the Growing Business
A business can only grow so large before it needs to start adhering to strict regulations regarding taxes and employment laws. It’s important to ensure that you understand these complexities or hire the right talent. To attract the best talent, you’ll have to start offering benefits, paid time off, and other perks–all these perks require specialized knowledge to administer.
Here are some of the things that may be expected of a business that has grown large enough to hire an actual payroll specialist:
- Ensuring hours worked are correct while making necessary corrections regarding paid time off, vacation time, etc.
- Making payroll and income tax deductions from employee checks, which may be complex because tax rates change based on income and must be calculated differently at each bracket; this may include federal, state, and even local taxes
- Making sure new employees are properly entered into the payroll system and registered as taxable employees with the appropriate governmental agencies
- Calculating 401k and retirement plan payments, as well as corporate matching amounts
- Administering disability or maternity leave payments to employees currently not working, but still listed as employees legally
- Deducting and depositing portions of payroll into other programs, such as a Health Savings Account (HSA)
- Compiling specialized and complex payroll reports for general accounting purposes, as well as reports related to taxes and wages for outside accounting and audit firms
Finding the Right Specialist for Your Business
Taking some load off your shoulders as a business owner and passing it to a qualified payroll specialist can make a world of difference in your ability to focus on what really matters–running the business. Fortunately, the game has changed when it comes to looking for new employees. Thanks to freelancer sites such as Guru, finding a payroll specialist for your company has never been easier. You can browse thousands of specialists for every imaginable category of job.
On Guru, you’ll see a specialist’s rates, past projects, reviews of their past work, and more. Once you’ve found the person you might want to work with, it’s important to ask the right questions to ensure they are capable of helping your business grow–so be sure you know the right payroll specialist interview questions.
Questions to Ask Candidates
While there are a thousand ways to interview people, asking the simplest questions can often help separate the best and brightest. Here are some examples of questions related to a payroll specialist job role:
- Do you have experience working for a company of this size?
- Have you ever worked with our payroll or accounting software?
- Do you know the tax laws of this country or state?
- Have you ever had to make corrections due to errors in payments or taxes?
- Are you familiar with 401k and health insurance deductions and payments?
Finding the right candidate isn’t just about finding someone with the experience needed–it’s also about finding someone who fits with your team culture, so be sure to have an extended conversation with potential candidates. Fortunately, Guru provides a wealth of information on a wide range of freelancers to help make your choice of candidates as easy as possible.