Check out all the helpful links in this article to help you start a payroll system for your business in Las Vegas.
Get an Employer Identification Number(EIN)
In order to hire employees, you need to get an employment identification number (EIN) from the IRS.
- How to Apply for an EIN Online for Your Las Vegas Business
- How to Apply for an EIN by Mail for Your Las Vegas Business
Get a City/State License
Some state/local governments require businesses to obtain ID numbers in order to process taxes.
Independent Contractor or Employee
Know the Difference. Be clear on the distinction between an independent contractor and an employee. In legal terms, the line between the two is not always clear and it affects how you withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment taxes.
Employee Paperwork
New employees must fill out Federal Income Tax Withholding Form W-4. Your employee must complete the form and return it to you so that you can withhold the correct federal income tax from their pay.
Choose a Pay Period
You may already have a manual process for this, but setting up a pay-period (whether monthly or bi-monthly) is sometimes determined by state law with most favoring bi-monthly payments. The IRS also requires that you withhold income tax for that time period even if your employee does not work the full period.
Document Your Employee Compensation Terms
As you set up payroll, you’ll also want to consider how you handle paid time off (not a legal requirement, but offered by most businesses), how you track employee hours, if and how you pay overtime, and other business variables. Don’t forget that other employee compensation and business deductibles such as health plan premiums and retirement contributions will also need to be deducted from employee paychecks and paid to the appropriate organizations.
Running Payroll
Once you have all your forms and information collated, you can start running payroll. Depending on which payroll system you choose, you’ll either enter it yourself or give the information to your accountant.
Keep The Records
Federal and some state laws require that employers keep certain records for specified periods of time. For example, W-4 forms (on which employees indicate their tax withholding status) must be kept on file for all active employees and for three years after an employee is terminated. You also need to keep W-2s, copies of filed tax forms, and dates and amounts of all tax deposits.
Report Payroll Taxes
There are several payroll tax reports that you are required to submit to the appropriate authorities on either a quarterly or annual basis.
