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  • There’s more to payroll than calculating wages and submitting paystubs. Payroll management is a detailed process that requires business owners to properly compensate employees for services performed, which includes calculating employee hours, distributing pay, withholding taxes, and keeping detailed financial records. As a business owner, this can be a lot to tackle. Luckily, there are trusted companies that can provide payroll services to business owners just like you. 

    Because payroll can be an overwhelming process, we’re here to guide you on how to manage your payroll process effectively. Continue reading to learn how to set up your payroll, how to manage your payroll, and what you need to document and file. 

    Setting Up Your Payroll 

    Before you can begin running payroll, you need to set up your payroll system. The first step involves registering for an Employer Identification Number (EIN). 

    1. Apply for an employer identification number

    An employer identification number is a unique nine-digit number the Internal Revenue Service (IRS) assigns to identify each business. EINs are also used for filing tax returns, submitting payroll, and providing identity protection for your company. You can obtain an EIN for free on the IRS website. Additionally, depending on local and state government regulations, you may need a state ID number to pay state income taxes. Learn more about your state’s registration requirements here. 

    2. Collect employee information

    To properly pay your employees, you need to collect the necessary information. Employers must obtain each employee’s full name, address, Social Security number, and tax withholding forms. Each employee must also fill out the following government documents: 

    • Form I-9: Employee Eligibility Verification 
    • Form W-4: Employee’s Withholding Certificate 
    • State withholding allowance certificates 
      • In most states, you’re required to withhold state taxes, as well as federal income taxes, from employee wages. Therefore, your employees must complete the IRS Form W-4 or a state withholding certificate.  

    3. Determine a payroll schedule

    After collecting the necessary business documentation and employee information, it’s time to choose a payroll schedule. A payroll schedule is the length of your pay period and determines how often you pay your employees. The most common pay schedules are weekly, bi-weekly, or monthly.  

    It’s important to note that your pay schedule should meet state regulations and fit your employees’ needs. For example, a payroll schedule may differ for a business that employs all salaried workers compared to a company that employs mostly hourly employees. 

    Payroll Management 

    Once you’ve obtained your EIN, the necessary employee information, and selected your payroll schedule, it’s time to run your first payroll. We’ve listed a brief overview of how to get started running your first payroll: 

    1. Calculate gross and net pay

    To calculate gross pay, you must add up the hours worked by an employee during the predetermined pay period; make sure to include bonuses or overtime pay. The total hours worked is then multiplied by each worker’s pay rate to determine the gross pay. Employers often use timesheets, punch clocks, spreadsheets, or timekeeping software to make time tracking easier. 

    After calculating gross pay, it’s time to make your pre-tax deductions. If you offer your employees benefits such as a 401(k) retirement plan, health benefits, or life insurance, then you’ll need to withhold those contributions. Next, you must deduct Federal Insurance Contribution Act (FICA) taxes, which include federal and state income tax, Social Security taxes, and Medicare taxes. Then, you must subtract the post-tax deductions, which may include court-ordered wage garnishments or union dues. 

    When all pre-tax and post-tax deductions are subtracted from the gross pay, your final number is your employee’s net pay or the amount your employee takes home. 

    2. Pay employees and deduct withholdings

    After making your payroll calculations, you’re ready to generate paychecks and initiate direct deposits. Payroll taxes must be filed with the government regularly and vary based on local regulations, business size, and location. You may be liable to pay the IRS if you fail to withhold the employee portion of employment taxes. 

    Filing And Documentation 

    While calculating payroll and tax deductions are an important part of processing payroll, you also must file these deductions with various agencies, including the federal government.  These tax reports include: 

    • Form 941 – Employer’s Quarterly Federal Tax Return 
      • Employers use this form to report income taxes, Social Security taxes, and Medicare taxes withheld from employee paychecks. 
    • Form 940 – Employer’s Annual Federal Unemployment (FUTA) Tax Return 
      • Only employers pay FUTA taxes – DO NOT deduct FUTA tax from employee wages. 

    After filing these reports, you must document and store these records. Filed records should include tax filings, pay stubs, and employee information such as address, occupation, birth date, and more. Business owners must keep all payroll records and documentation for at least three years. Failure to do so may result in costly penalties or non-compliance fees. Businesses that violate Fair Labor Standards Act (FLSA) requirements, such as minimum wage, overtime pay, or record-keeping, may be fined up to $1,000 per violation. Keeping payroll records is also useful when you send your annual report to the IRS and can provide evidence if there is ever an employee compensation dispute or audit. These fees can quickly add up and take their toll on your bottom line. 

    Choosing Your Payroll Process 

    It’s important to note that there’s more than one way to process your payroll. The best option for your company may depend upon your industry, budget, the type of workers you have, or the amount of time you have. There are three main options to choose from: 

    1. Manual payroll

    Manually processing payroll is the most inexpensive way to process it. Despite the fact that manually processing payroll is less expensive than software or outsourcing, you, as a business owner, will be liable for any mistakes made. If you’re like most business owners who don’t have extensive payroll training, manually managing payroll can leave you vulnerable to costly errors and IRS penalties.  

    2. Payroll software

    Investing in payroll software allows you to streamline your payroll process by managing tasks online, automating payroll calculations, and more. While software can save time and simplify the overall process, you will still need to oversee payroll compliance and management. 

    3. Outsourcing payroll

    Although outsourcing payroll services is more expensive, it can save you time and potentially reduce compliance issues. When you outsource payroll administration to an outside company, such as a professional employer organization (PEO), you have access to payroll experts who take care of every function of payroll management, such as recordkeeping, handling payroll taxes, and processing paychecks. While a PEO streamlines these processes, you will still retain full control and direction over your employees. 

    GMS: A Trusted Payroll Partner 

    Whether you’re a payroll expert or not, the payroll process can be tedious. It can also be time-consuming to manually calculate paychecks or stay up to date on payroll regulations and important filing dates. Luckily, Group Management Services (GMS), a PEO, can take the burden of payroll off your shoulders.  

    With GMS’ state-of-the-art payroll technology and dedicated Payroll Specialists, you can spend less time worrying about overtime calculations and tax deductions and more time focusing on growing your business. As a PEO with strong data security, quality customer service, and accurate processing technology, GMS can be the trusted partner that decreases your workload, lowers liability, and ensures compliance.  

    Contact GMS today to simplify your payroll process! 

  • Promoting safe behaviors in the workplace is crucial for creating a secure environment for employees. It goes beyond mere compliance with safety regulations and involves fostering a positive safety culture. Unsafe behaviors and poor decisions are significant contributors to workplace accidents. In fact, approximately 90% of workplace incidents result from unsafe behavior and human error. If employees are unaware of the hazards or aren’t motivated to follow safety procedures, their subsequent behavior will expose them to risks.

    While it is a legal obligation to implement safety protocols and provide necessary safety equipment, such as personal protective equipment (PPE), establishing a culture that prioritizes safety is essential for protecting your team. Ensuring safety is not just about compliance; it’s about fostering an environment where every team member is committed to maintaining a safe workplace.

    Promoting safe behaviors and creating a secure environment is a gradual process that requires continuous effort and dedication. It involves regular training, clear communication of safety standards, and encouraging open discussions about safety concerns. While a significant lift, cultivating a culture that prioritizes safety can significantly reduce workplace injuries, boost morale, and minimize productivity disruptions.

    Seven Ways To Promote Safe Behavior

    Workplace injuries require extensive documentation and reporting, diverting time and energy away from projects. This administrative burden can slow down operations and detract from overall productivity. Moreover, the absence of an injured team member places additional strain on the remaining staff, who must cover for their injured colleague. This added pressure can lead to increased stress and fatigue, potentially compromising the safety and efficiency of the entire team.

    Building a culture that values safety also means leading by example. When management demonstrates a commitment to safety, it sets a standard for the entire team to follow. The actions of your leadership team not only reinforce the importance of safety but also encourage employees to adopt and maintain safe practices.

    There are a few things you can implement to help build a safety-based culture, including:

    1. Involve employees in the identification and correction of hazards. Have them participate in the development of job hazard analyses (JHAs), which should consist of critical behaviors as well as hazards.
    2. Periodically audit your operation to assure compliance with OSHA regulations and industry standards like the American National Standards Institute (ANSI) by conducting detailed walk-through surveys of your work area and, if possible, the entire plant. 
    3. Perform safety observations to encourage safe behaviors. This can include supervisory observations or, ideally, peer-to-peer safety observations after employees have received training. 
    4. Give recognition to employees who perform tasks safely and demonstrate proper behaviors. 
    5. Ensure that training builds awareness of the critical safety behaviors for each task. In addition, training should be conducted immediately following significant job task modifications. Refresher training should also be provided during employee meetings to guarantee everyone receives the same instruction.
    6. Make sure that appropriate controls are in place and operational. Periodic inspection and maintenance are critical.
    7. Investigate every incident and near miss for root causes, communicate the findings, and correct deficiencies. If a safety procedure is challenging to follow, analyze and modify the procedure or task as needed so that employees will not be tempted to break the rules and work unsafely.

    Behavior-Based Safety

    Behavior-based safety (BBS) is a proactive approach that focuses on observing behaviors and their consequences to enhance workplace safety. Although it requires considerable effort to maintain, when implemented effectively, BBS can significantly mitigate the risks of accidents. A successful BBS approach relies on everyone agreeing and consistently practicing safe behaviors for all identified hazards.

    Employees can implement the straightforward process of JHAs to ensure comprehensive awareness of hazards and their respective controls for each task. The development of JHAs begins with performing thorough hazard assessments. These assessments identify both the dangers inherent in tasks and the critical behaviors needed to prevent unwanted outcomes. Utilizing a Hazard Assessment Form can aid in evaluating tasks, identifying hazards, and determining the necessary controls.

    A Hazard Assessment Form engages with staff purposefully and critically examines unsafe conditions. Observing employees and discussing their tasks can help identify the behaviors needed to prevent mishaps and situations that might lead employees to make dangerous choices. For example, if using a piece of safety equipment is required for a task but it is not readily accessible, a team member may choose to make an unsafe decision for the sake of getting the job done quickly.

    Protect Your Business Today

    To truly enhance workplace safety, consider strategies that simplify processes, increase safety, and strengthen overall operations. Partnering with a professional employer organization (PEO), like GMS, can provide comprehensive support in these areas.

    GMS offers various services, from on-site training to consulting and OSHA compliance. Our workplace safety experts are ready to assist you in addressing your team’s questions and building a robust culture of safety. By leveraging our expertise, you can ensure your workplace adheres to the highest safety standards while streamlining processes and enhancing overall strength and efficiency.

    Contact GMS today to talk with one of our experts about how you can ensure workplace safety at your organization.