Most people are nervous about their first job and those feelings are typically worse for payroll professionals.
They have to manage hundreds of thousands of dollars in payments, sometimes even millions if the company is big enough. One tiny miscalculation can lead to major problems.
Keep reading below if you’re new to a payroll job. We’ll discuss five ways you can set yourself up for success.
1. Payroll Professionals Need To Be Organized
It’s the job of payroll professionals to track hours, store employee information, calculate taxes, deduct pay for benefits, issue payments, and more.
One mistake could mean one of your employees doesn’t get paid. Or worse yet, your company gets hit with severe tax penalties. Whether you use payroll software or do it yourself, find a system to stay organized.
2. Classify Employees for Managing Payroll
Companies hire different types of employees: full-time, part-time, temporary, contract, or freelance. Once hired it’s the payroll professional’s responsibility to help with employee classification.
The reason it falls under payroll is that classification determines how much an employee is paid, the maximum hours worked per week, and whether benefits are deducted. You’ll need to classify all employees and keep on top of them.
3. Invest in Software To Help With Paychecks
Earlier we suggested using software to help with payroll. This is a wise choice because it can help you with file storage, calculations, and even provide some amazing paycheck templates.
Paystubs are also important for employees as proof of income. They’ll need this in order to apply for loans. In some cases, they’ll have to show it to new jobs.
4. Set up Automatic Payroll Taxes
Calculating state and federal taxes can be tricky and it’s easy to make an error that could result in a penalty worth thousands of dollars. The good news for you as a payroll professional is that you can incorporate software to automate your tax payments. Payroll tax penalties can cost up to 15%.
Find a way to set automatic payments so you can focus on improving other aspects of your company’s payroll system.
5. Monitor Shifting Payroll Rules and Regulations
Tax rules and regulations are changing every year. It’s your responsibility as a payroll professional to keep up-to-date. The truth is most people working at your company aren’t familiar with the rules.
One survey found that 45% of small businesses claimed to be familiar with tax regulations that didn’t exist. The same amount didn’t even issue W-2 forms to their employees!
Your knowledge and experience can help navigate the always-changing world of payroll taxes.
Experience Success in Your New Payroll Job
New payroll professionals and experienced veterans can benefit from the tips we provided above.
The first thing you should do is find high-quality payroll software within your budget. Once you’ve set up your system, continue to monitor how payroll and tax laws change each year.
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