Steps to Comply With Federal and State Requirements for Employee Payroll Taxes

Steps to Comply With Federal and State Requirements for Employee Payroll Taxes The process of Payroll, if done incorrectly can cost your business a lot in labor and tax penalties. Save time and money with the following steps. Step 1: Your employees must... More

Steps to Comply With Federal and State Requirements for Employee Payroll Taxes The process of Payroll, if done incorrectly can cost your business a lot in labor and tax penalties. Save time and money with the following steps. Step 1: Your employees must complete IRS W-4 forms (Employees Withholding Allowance Certificate), and return them to your business. These forms indicate the number of withholding allowances each employee wishes to claim. On this form the employee can also indicate any additional dollar federal income tax withholding they wish to have deducted from their pay. Step 2: Each employee must have a payroll card on which you keep their cumulative payroll information: Gross pay, all tax and other with-holdings and net pay. You should create a new payroll card for each employee every year. Step 3: Calculate each employee's gross pay for each payroll period by either dividing their annual gross pay by the number of pay periods in the year, or by multiplying their hourly wage Less