What are the Tasks Involved in Processing Payroll and Paying Payroll Taxes?

If you are a business owner or if you work for a payroll service then you know you must pay your employees which the easier part of the process. You probably also know that you have to pay taxes and report on those which can be a lot more challenging especially they can change regularly and depending on the type of employees you have and how much money they make. To make this process a little easier, you will find here all the information you need to know on how to process payroll and taxes.

First payrolls

In order to pay your employees you need to

first identify the gross pay per pay period. This is based on their gross yearly salary divided by the time your employees worked during this pay period. Alternatively, if your employee is paid hourly, then all you need to do is calculate the hourly rate by the number of hours worked during this pay period.

Secondly, you need to take deductions as per the law and depending on the agreement with your employee. Those are usually for federal and state taxes as well as unemployment and medical insurance and social security.

Check Payrollserviceaustralia.com.au for more information to help you identify those deductions.

Payroll taxes

As an employer, you will need to pay taxes and depending on the number of your employees, those should be reported biweekly or monthly. Payroll taxes usually include the federal and state taxes you collected from your employees, any social security fees as well as the insurance and social security fees you owe as a business owner.

As you can learn from Payrollserviceaustralia.com.au, there are many additional payments to be made. In addition to the standard payroll taxes listed above, you may actually have to make some additional payments, depending on your situation. A regular payment is usually unemployment insurance and the local taxes that you may need to deposit on a regular basis. Those payments also must be made biweekly or monthly.

Report on the payroll taxes

Employers are required by law to report on all the taxes, the benefits and insurances they pay to their employees. A quarterly report on the liability payments and related taxes is required, while the report on unemployment should be done on a yearly basis. Any other payments, deductions and compensations must be also reported on a regular basis.

Remember that payroll taxes are very important and failing to pay them or report on them can get in some real trouble. It may be seen as a fraud, even if it is a simple honest mistake and you will be fined with huge penalties. By knowing the rules and regulations around this you avoid getting into trouble and you ensure that you are safe and in a good standing with the law. Even if it means that you will need to resort to a payroll service to do this work on your behalf or to explain this issue to you. You can know more at: https://www.allchicagojobs.com/advantages-of-payroll-companies-vs-doing-it-yourself/