Part 4 in an eight-part series on Becoming an Employer.
Payroll can be complicated, so you should determine which payroll process will work for your business before you hire anyone. Here are some choices:
- Do it yourself by hand. The IRS provides Publication 15 (Circular E) — the tax table booklet — for every employer. You can also find this information online at IRS.gov.
- Use an accountant or a bookkeeper to handle your payroll, payroll taxes, and payroll tax filings.
- Choose a payroll provider or payroll software. Payroll providers offer many different levels of service. Some payroll services are designed for larger companies and handle all aspects of payroll, including paycheck delivery. Many off-the-shelf payroll software products are designed for larger businesses. Others are more appropriate for small business, offering online access to do-it-yourself payroll with a la carte options such as bookkeeping or timekeeping features.
You can also sign up for a payroll tax filing service, in which deposits and filings are made on your behalf.
Shop around carefully; look for a payroll provider that offers clear terms of service and a price structure you can afford. Factor in any hidden costs, such as limits to the number of payrolls you can run per pay period. For more on choosing a payroll provider, refer to our article “Making Sense of Business Payroll Options.”