If you're a small business owner, you know the headache that payroll can be. The average small business owner spends 10+ hours per month simply to pay their employees, let alone all of the other responsibilities that fall on their shoulders. There are a few different payroll schedules to choose from, and it can be difficult to decide which one is right for your business. In this article, we will help you decide which one is right for you. We'll also provide some tips on how to manage your payroll successfully. Let's get started.
Choosing a Payroll Schedule
Typically payroll is run weekly, bi-weekly, semi-monthly, or monthly. There are pros and cons to each option, so you'll need to weigh your options carefully.
Using a Weekly Payroll Schedule
If you own a business that relies on manual labor and/or hourly workers, you might want to consider a weekly payroll schedule. This schedule allows you to keep your payroll costs matched to your business's income. So if you have a holiday weekend coming up and you own a retail store, you can expect higher payroll costs for that week. If business has been slow and payroll was too high, you can cut some hours the next week.
Many businesses that rely on manual labor have employees that will expect a weekly pay. However, there are pros and cons to every schedule. While weekly payroll is easy to stay on top of, it can also be more expensive and time-consuming than other options.
Using a Bi-Weekly Payroll Schedule
If you choose to run payroll bi-weekly, you'll need to process payroll every other week. This is the most common schedule for businesses in the US. It's also an excellent option for businesses who have a blend of salaried and hourly employees. Most importantly, you'll need to make sure you have enough funds to cover two-weeks pay at all times. A lot of employees appreciate the biweekly payroll schedule for organizing their own finances. If they take a few days off, it has a smaller impact on their paychecks than it would with a weekly payroll schedule. But it also reduces the stress of making one paycheck last an entire month.
Using a Monthly Payroll Schedule
If you choose to run payroll monthly, you'll need to process payroll once per month. This can be a good option for businesses that have a small number of employees, as it's the least time-consuming option. However, many states require that employees are paid more than once per month. So make sure to review the requirements of your business's state. A monthly payroll schedule is less common these days for this reason. Typically businesses who do so either have one sole employee, or a commission-based team.
Using a CPA For Your Payroll
But what if you don't have the time or resources to process payroll yourself? That's where a CPA comes in. A CPA can help take the hassle out of payroll and ensure that your taxes are filed correctly all along the way. A CPA can help you choose the right payroll schedule for your business and provide support throughout the year. If you're looking for hassle-free payroll, contact Chris Haro CPA for more information.