Connect with us


How to keep up with Payroll and HR as a small business owner

two women sitting on leather chairs in front of table

Your employees are your most valuable assets. While they bring their own skills and expertise to the table, you’re responsible for compensating them fairly, offering proper insurance and benefits, and making sure your business abides by federal, state, and local regulations regarding employment practices. If you run a small business—with up to 100 employees or fewer—you may handle some or all of these tasks yourself rather than relying on an outside HR department or consultant, but that doesn’t mean you can ignore them altogether. Here are five ways to improve payroll and HR as a small business owner.

1) Understand Taxes

Start by figuring out what kind of taxes your business will need to pay. That means knowing whether you’ll be hiring full-time employees (if so, they’re subject to payroll taxes) or freelancers (who are responsible for their own taxes). It also means knowing if you’ll be collecting sales tax—and if so, how much—from your customers. You should also make sure you understand how different taxes impact financial reporting; after all, money talks. If possible, stay on top of taxes by having someone who can competently handle accounting duties at your company from day one. Your CPA may charge more for an initial set-up fee but it could save you long-term headaches—not to mention some cash.

2) Organize Personnel Files

Organizing employee files is a simple administrative task that can save you hours of time. Keep copies of important documents, such as insurance cards, employment agreements, hiring forms, and company policies. Any paperwork relevant to each employee should be kept in one place so it’s readily available for reference or audits from government agencies or other third parties. Sort papers into separate folders for each person, including an updated folder where paperwork can be thrown once it has been signed or filed away. It also helps to create index files so you don’t have to hunt through a giant pile of documents just to find one piece of information quickly.

3) Keep Up with Employee Status

One of your top priorities is keeping track of your employee’s employment status. Each state will have different laws regarding which employees require you to send them W-2s or 1099s; if you don’t know what these are, ask your accountant! Be aware that not having forms on hand for an employee might put you in a vulnerable position in case they leave for another job—even after they’ve received payment. It also means you could be held liable for taxes owed, so take extra care when dealing with special statuses. If there are any changes to an employee’s employment status, let them know immediately so that nothing falls through the cracks.

4) Prepare W2 Forms

Once you have a few employees, it’s time to get all of your paperwork in order. Your W2s need to be filled out by each employee for their tax returns, so if you do them yourself or ask someone else to fill them out, just be sure that you have every form completely correct. The last thing you want is for your staff members—or worse, their employers—to have incorrect information for their taxes because of something stupid on your end. The IRS doesn’t look kindly on payroll errors either.

5) Create Labor Agreements

If you have employees, it’s important that everyone involved in an employee-employer relationship knows exactly what they’re supposed to be doing. Have every worker sign an employment agreement that spells out their obligations, responsibilities, compensation, benefits, advancement opportunities—you name it. You can use labor agreements for full-time employees, part-time workers, temporary workers, and contractors. These agreements will give you some added peace of mind while making sure your employees understand what they need to do—and vice versa. Additionally, if your business ever ends up facing any legal action or dispute resolution proceedings related to labor issues or employee relations disputes (think lawsuits about wrongful termination), having these documents in place will help defend against any future accusations of unfair treatment or illegal behavior on your part.

6) Automate your HR and Payroll department

In order to manage everything on your plate, you have to use technology wisely. Set up some sort of time management system so that you can stay on top of things while freeing yourself from mundane tasks. For example, try using software for human resources management or payroll software so that you don’t have to deal with it on a day-to-day basis. If you use a paper timekeeping system, there’s also software out there that can help increase productivity by helping employees track their time more easily. Integrate invoicing into your accounting system for payroll processing in order to get paid sooner rather than later—and get cash flowing back into your bank account sooner too!

Stanley Gatero is a writer at Disrupt Magazine. He covers topics concerning technology, entrepreneurship, news, and sports. He is an avid traveler.

Advertisement Become A Crypto Expert

Join Disrupt Magazine

Become A Disrupt Contributor

Most Disruptive

Meatsmith Team Snowboard Canada Meatsmith Team Snowboard Canada
Press Release23 hours ago

Beijing 2022: Grass-Fed Beef Protein Bar Meatsmith Partners With Team Snowboard Canada

Meatsmith – Official Partner Of Team Snowboard Canada For Beijing Olympics 2022 Toronto, Ontario – Meatsmith is proud to announce...

Disrupt Prime Video3 days ago

Top 3 NFT Projects under 1 ETH | NFT Disruptors Podcast

A non-fungible token (NFT) is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger. NFTs can...

NFT7 days ago

Polly Kole, The Beauty With Gifted Hands Tycoon Of NFT Sculptures

In a society full of stereotypes, people clinging to appearance and disregarding one’s achievements is the magnificent Polly Kole stunning...

News4 weeks ago

Spider Man; No Way Home’, Crushes Box Office Estimates Generating A Mammoth $253 Million In North America.

After only 3 days in the cinemas, the latest and last Spidey outing disrupted the international market as the highest-grossing...

Cryptocurrency1 month ago

Nike just bought a virtual shoe company that makes NFTs and sneakers ‘for the metaverse’

Nike, the sportswear mogul, recently stunned the globe as it moved into the realm of the metaverse industry and blockchain...

QR code screenshot QR code screenshot
Diversity in Tech2 months ago

BTC did 62% more in transactions than PayPal this year

MasterCard and Visa have always topped as the runaway leaders; however, Bitcoin’s Lightning Network will soon disrupt this norm. Starting...

high angle photo of person holding turned on smartphone with tall buildings background high angle photo of person holding turned on smartphone with tall buildings background
Social Media2 months ago

How to Organically Grow Your Social Media Following In 2022

Instagram On Instagram, use Reels to reach new audiences and grow – find popular sounds and use them in your...

gold-colored Bitcoin gold-colored Bitcoin
Cryptocurrency2 months ago

Julio Domenech On How Banks Can Engage In Bitcoin in 2022

As cryptocurrency continues to become a popular trend in the US, many people are looking for an opportunity to participate...

Diversity in Tech3 months ago

Microsoft Teams, Incorporating New 3D Avatars And Virtual Meeting Spaces Before Mid 2022

Microsoft Mesh has always led as the future of Microsoft Teams meetings. However, Meta, the newly launched Facebook company, is...

Health + Fitness3 months ago

Stephen Campolo – How A Former Fat Kid Transformed His Body And Is Now Helping Others Do The Same

UPDATE: During a recent interview with Yahoo! News, Stephen revealed that he will be speaking at the next Disrupt Puerto...


Copyright © 2020 Disrupt ™ Magazine - Disrupt is a Minority Owned Privately Held Company

Disrupt ™ is the voice of Latino entrepreneurs around the world. We are part of a global movement to increase diversity in the technology industry and we are focused on using entrepreneurship to grow new economies in underserved communities around the world. We enable millennials to become what they want to become in life by learning new skills and leveraging the power of the digital economy. We are living proof that all you need to succeed in this new economy is a landing page and a dream. Disrupt tells the stories of the world top entrepreneurs, developers, creators, and digital marketers and help empower them to teach others the skills they used to grow their careers, chase their passions and create financial freedom for themselves, their families, and their lives, all while living out their true purpose. We recognize the fact that most young people are opting to skip college in exchange for entrepreneurship and real-life experience. This Podcast was designed to give them a taste of that.