Setting up payroll for a startup involves several steps:
Register Your Business: Ensure your business is legally registered and has an employer identification number (EIN). Classify Employees: Properly classify your workers as either employees or independent contractors. Choose a Payroll System: Decide whether to manage payroll in-house using software or outsource it to a payroll service provider. Many startups choose payroll software for its ease and affordability. Set Up Payroll Schedule: Determine the frequency of payroll (weekly, bi-weekly, or monthly) and set up a consistent schedule. Calculate Withholdings: Accurately calculate federal, state, and local tax withholdings, as well as any other deductions such as benefits contributions. Maintain Records: Keep detailed records of all payroll transactions and employee information for compliance and auditing purposes.