Talking Cents

Payroll advice for small businesses in Melbourne

As a small business owner, you hire people to work for you, and it is important to pay them. Especially when your business grows, it is crucial to find an efficient system for you and your business to pay your workforce.

To implement an efficient payroll system, make sure you have an employee identification number (EIN) because you will need to it before submitting documentation to the appropriate state and federal agencies. You can get it from IRS and depending on your location, you may need a state or county ID number.

Apart from that, you need to understand the differences between an independent contractor and an employee, as it will affect the reporting requirements. Independent contractors are like freelancers, and you are not responsible for their taxes and social security etc.

After decide how much you are paying your employees, keep records of those documents with specific terms by having a few hardcopies and a softcopy. One of the few worst things for an employee is payment discrepancy.

Now, you have to decide if you want to do it yourself, or hire an external team. Most small business owners will do it themselves, but before you decide, estimate how much time you would need. Then, also consider if you would benefit from having more time to do other things. With some “extra” time, you can focus on the growth of your core business. If you are looking at hiring an external team, do make sure that they are specialised in small businesses as that they can satisfy your needs better.