To assess your payroll needs, answer these ten questions about your company and its payroll system.
What is the size of my business?
When considering payroll software, you don’t need to think about the size of your business in terms of revenue or number of customers. You only need to consider two things: how many employees do you currently have and how many more are you likely to add in the next year or two?
What type(s) of employees do I have?
You can have both regular employees and independent contractors on your payrolls. Additionally, you can pay your employees a fixed monthly salary, an hourly wage, or a base salary plus commissions or tips.
The payout structure and tax requirements for each differ, and you need to know these numbers to assess your payroll needs. If you only have independent contractors, you may be able to meet your needs using online payroll software, which is usually less expensive.
How do I pay my employees?
Do you need to make direct deposits or manage check payments? Need to make international payments through platforms like Stripe and PayPal? Think about how you will transfer money from your bank account to your employees’ bank accounts and make it as easy as possible.
How often should I pay my employees?
Do you pay all your employees at once or do you have different schedules for different categories? For example, you could pay them weekly or bi-weekly. In the case of independent contractors, you could pay them every time they bill you.
The payroll system should be able to handle these payments in addition to off-cycle payments like expense reimbursements, bonuses, commissions, etc.
Are all employees based in the same location?
If you have employees spread across different states or around the world, you will need to adhere to more regulations. With hybrid and remote working becoming commonplace in the wake of the pandemic, you have to consider whether you might have people working from different locations in the future.
Who is responsible for processing payroll?
If you have a person or team dedicated to payroll processing, you can probably get away with DIY payroll software, which might be cheaper. Otherwise, you should consider investing in an outsourced payroll service even if it is more expensive. This will help ensure that payments are processed accurately and on time.
What are my local/state payroll laws?
Payroll laws depend on the locality, state and countries where your employees reside. You need to know what municipal, state, federal or international laws you must comply with. If in doubt, contact a payroll professional in your area for advice.
How should I manage social charges?
Payroll taxes can become complex and cumbersome as your business grows. You have to decide whether you want the new payroll software to handle taxes or not. If the answer is yes, carefully consider the cost of year-end calculations, as this usually comes with an additional price tag. If you don’t, be sure to hire a reliable tax professional to handle this process for you.
What deductions should I expect?
Before you make payments, you must withhold tax deductions (income tax, payroll taxes, etc.), wage garnishments (unpaid loans, alimony, alimony, etc.), and benefits (health insurance , etc).
What is my budget?
Cost is an important factor when choosing payroll software. You should have a ballpark figure in mind that you are willing to pay monthly or annually to meet your payroll needs. This will help keep you from overstretching yourself when you’re tempted to pay extra for a la carte features.