If you’re a business with more employees, you need to have a payroll system. If you pay your employees consistently and without delays, you emphasise their morale and kind of reflect your business’s financial stability. Furthermore, the payroll system is mandatory with the federal and state laws. While the payroll system may be complicated, but its an efficient system to streamline and centralise the payroll strategy. But first, let’s discuss what a payroll management system is?
Basically, the payroll management process includes the handling of employee’s financial records such as the salaries, wages, bonuses, deduction and net pay. All records must be properly maintained and well kept by the employer to suit federal requirements, especially related to payroll taxes.
In the US, a typical pay length period is bi-monthly or every two weeks. A survey shows around 36.5% of private company pay their employees bi-weekly, while 32.4% are paid weekly. If you’re a business owner, you need to establish and manage your payroll management system to emphasise your business with the following:
- Morale of Employees: If you don’t pay your employees on time, they can question the integrity of your business. If they feel their job is unstable and unsecure, they will not perform well and may decrease the workforce productivity and quality of the organisation. It can also affect their net worth and overall compensation with benefits and bonuses.
- Lower Tax Bills: Consistent and appropriate payroll management system will minimise federal and state taxes. However, if you do it inaccurately, you can possibly pay hefty fines. Hence, ensure all FICA taxes are withheld every payroll and ensure your employees accomplish the W-4 properly.
Whether you have a huge, middle or small-sized business, you need to handle your payroll system well. If you have fewer employees, you can utilise a one-write system. Those business owners who know nothing about the processes may find it difficult and challenging, due to the different state and federal requirements needed to comply with. This is probably the reason why some businesses outsource their payroll management system to ensure compliance with applicable laws. For those who prefer to do it on their own, they can buy an automated payroll system for time-saving and cost-efficiency.