Payroll forms can put a lot of pressure on business owners. When you’re in charge of a small business, it’s up to you to make sure that these forms are not only completed accurately, but on time as well. If you’re not careful, the penalties can range from $50 per faulty form all the way up to hundreds of thousands of dollars for notable violations.
One of the biggest struggles of managing payroll forms is simply knowing which forms apply to your business and what they do. We’ve compiled a list of payroll forms that you’ll likely need to know for your small business and how they work.
Payroll taxes are complicated, especially when you don’t have any payroll training. Small business owners have several tax responsibilities that they must manage throughout the year, which can take up hours of your time each month. Of course, if you incorrectly calculate the tax withholdings for someone’s paycheck, both the employee and the federal or state government may have a bone to pick with you.
One of the most time-consuming and difficult parts of payroll tax management is that there is more than one type of tax that you need to handle. You are responsible for withholding multiple types of taxes from your employees’ wages, including income tax and payroll tax. These taxes each have specific rules in terms of how you and your employees contribute to them and what groups regulate them. Here’s a rundown of the difference between income tax and payroll tax.
Payroll isn’t nearly as simple as just paying your employees. Payroll management encompasses several different steps and responsibilities. Each part of the payroll process requires you to take certain actions or make decisions that impact how your employees are paid and ensure that your business is compliant with any government regulations that apply.
As a small business owner, it’s your responsibility to either take care of each of these steps—or find someone that you trust to manage payroll for you. Here’s a guide to help you learn what it takes to properly manage payroll for a small business.