There are lots of things that you need to know when running a business. When you first start out it can be managed quite well. When the business starts to expand and you have more employees, product and services you need to be able to expand with it. The expansion of a business means that there is more money that is being handled and that is why you want to have a good accountant to take care of it. You want to know what your cash flow is and how well your business is doing financially. You also want to make sure that you are taking care of your employees and paying them properly. This is a process that is referred to as payroll. It is not as simple as just giving them an hourly wage and checking for their hours there is much more that goes into it. Mark Dicus & Company outlines what goes into your payroll calculations.
Employee Working Hours
The first thing you need to know about each of the employees is the amount of hours that they work during the pay period. This is not the same for each person and has to be calculated individually. The other thing you want to do is make sure you have a way to keep track of the hours they work. The best way to do that is some form of electronic check in system that cannot be altered. The hours have to be calculated so that you know what amount to pay employees based on their hourly wage.
Withholding Tax Rates
You also have to make sure you know what amount of taxes you are required to withhold for each person. The amount of taxes that are being held are going to differ from one person to the next. They have to fill out forms that are used to help determine what that is. Whether they are single, married and have dependents will be used to calculate this information. It is best to leave these calculations to a professional that can handle payroll services.
Sick Days & Vacation Leave Time
Most companies offer incentives for working there in the form of time off. This can be time that you can accrue by working your regular hours. It can be used when you are sick and need to use a day off to recover. There are also hours you can accrue that can be used as vacation time. That way you can plan a trip and take days off and not have to worry about missing a paycheck. These hour have to calculated and shown on each employees pay stub. You also have to know how to use these hours to pay them if they choose to cash in. It is your responsibility to have something set up to calculate them properly.
Overtime Work Hours
There are times that business is so busy that you need to ask employees to work more than their standard hours. This is then considered overtime and most people offer an incentive to take these hours on. The rate that they are paid is higher and has to be cacluated and paid in that manner. This is another aspect of payroll that makes it best to use a professional.