If you're at the stage of your business where it's time to bring on help, one of the most daunting things can be figuring out the best way to pay your new employees. Sure, it sounds simple enough: write check, thank them for the help, continue on, but it's so much more complicated than that. Taxes, benefits, compliance, all of these are overwhelming details that will have to be handled in order to ensure that you're doing everything above board. Luckily, there are ways to get everything handled quickly and make sure you hit the ground running with your team. When you're ready to hire on, follow these steps:
Determine If The New Worker is an Employee or a Contractor
I think one of the biggest misconceptions is the role of workers in a small business. Before you decide to bring on employees or interns, make sure you're staying in full compliance with regulations for each. While it may seem easier to just bring on freelance contractors and let them sort out their own taxes, there are strict stipulations for what a 1099 worker can and cannot do (same goes for interns). Make sure you're aware of the duties the new hire will be doing and decide whether or not you'll need to hire them as a W-2 or a 1099 contractor.
Find Accurate Time Recording Software
Whether you're hiring at a fixed rate like a salary or hourly, having a 3rd party that keeps track of your new hires comings and goings can be a great way to make sure there's an unbiased system of accountability. Some may even keep track of vacations and PTO, and the cost can be very manageable. If you haven't yet hired an HR person or benefits manager, online time recording software might be an easy solution for your small business.
Outsource Your Payroll
The simplest way to make sure you're in compliance and that your pay is handled on time is to delegate it to professionals, whether it's an online service or a local accountant. BenefitMall was my preferred company for online payroll services but do your research and make sure that whatever company you use, they are able to handle the regulations and laws for your location. Don't waste time trying to figure it out yourself, as employee pay is one area that should definitely be handled by professionals.
Whatever you plan to use, make sure that you're able to have everything up and running smoothly before your new employee's first day on the job and you'll be sure to have an easy and fast onboarding time that lets you focus on making sure your team is able to grow your business without unnecessary stumbling blocks (and visits from the IRS). Welcome aboard!