Payroll

Renax

I started construction business recently and wrote my first payroll check. I wanted to ask you how do you do your payroll? Do you have your CPA do it for you or use some kind of software? I find it very expensive to have my CPA do it, so I was thinking of using some online services do it for me. I don't have any employees, so I think I could handle payroll myself. Any suggestions?

ProWallGuy

Look into the chain-type offices that do this exclusively. Around here we have ADP, Paychex, etc. Only around $10-$20 per month for one man.

Google is your friend.

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Danahy

[quote=Renax;156861]"wrote my first payroll check". vs. "I don't have any employees" quote]

?

Mike Finley

Quickbooks.

George Z

Quickbooks.

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Renax

Thanks, I looked into Quickbooks, however their payroll processing service is kind of pricey. They charge $17 for basic and don't do federal or state tax deposits and filings (you have to pay $59 for that). Sorry, it might be a dumb question, but if I used their $17 service to calculte payroll taxes, how would I deposit them with IRS and State? How do you guys do all that tax stuff?
I am completely new here, so please bear with me...
THANKS!

ProWallGuy

The ones I mentioned do all that stuff for you.

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Renax

I contacted ADP today, and a very lovely lady informed me that their services would cost me $58/month. I don't know if that's a lot or not (personally I think it's a lot), but I just don't believe that most contractor's who have only one person on their payroll, pay this amount each month. I mean, I only have one check to cut per month to myself! Or am I wrong? How much do you pay?

ProWallGuy

Around 2 years ago, I used Paychex. It cost me $54 a month to have them cut 5 checks bi-weekly.

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Mike Finley

I don't think you are going to find a cheaper solution than quickbooks.

If you have a CPA ask him/her about setting up your payroll for a one time fee and walking you through the process.

Also, there are different levels of accounting professionals. A book keeper is usually a lower level accounting professional (translation - cheaper) and will help you with the more mundane tasks, your high level accounting professionals such as your CPA accountant are good for taxes, filings and advice.

Danahy

When I had employees, the gov sent me payroll deduction cd rom. A new one every year. It's basic, it works... Quickbooks is far superior however, but the cd from the gov was free. (Canada Gov that is)

MattCoops

just get a checking account with bank of america
and as long as you have less than 10 employees, it's free payroll right online

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Renax

Thanks everyone for responding.
So I decided to go with Paycycle. The price is reasonable and the whole process is very simple.
I've been playing with this program for the last couple of days. At this point I am really stressed:
I decided to run a payroll for $2,000. After all the tax deductions my net pay was around ~$1,600. However, there was another portion of taxation - employer portion, which resulted in another $400 (SS, Medicare, FUTA, SUI, bla bla bla) What I am trying to say, is that my idea of $2,000 materialized into $1,600 net + $800 tax liability!!!! Ok ok ok, I understand, I have to pay my share of taxes, but it got me thinking, if S Corp's payroll results in less tax? (I have C Corp) Or is it the same amount?
I would appreciate your input.
Thanks!

Danahy

400.00 for employer contributions? wow that seems like alot. Here in Canada it would be (these are approx figures)

2000 gross.
less 88 pension
less 44 ei
less 400 tax
net pay to employee... 1450.ish...

employers portion
88 to match pension
44 x 1.4 to match ei
+ 4% or 7% holiday pay (this is something else, but it still applies)

so employer portion as you can see is about 150.ish plus about 80, so $230.ish... plus or minus...

scottstef

i have an S-Corp and ran a $2000 payroll. i got to keep over $1500 and had a $750 tax burden basically $250 for employer match. just remember, i live in maryland i am not sure what state you live in so your numbers might be different.

Renax

Thanks.
Ok, I might have exaggerated on $800, but the fact remains, that regardless whether the Company is C Corp or S Corp, the tax burden on payroll is the same, correct?
I just checked the numbers on $2000 again:
Net $1,681.17
Employee taxes - $318.83
Employer taxes - $273.00
Therefore, total tax liability - $591.83... (It's still a lot!)

(By the way, I am from Illinois)

CHIAML

The employer EXPENSE is to match the employee's FICA (7.65%). The employer also has to pay for SUI and FUTA. These are all deductible business expenses. The employer's LIABILITY is to also pay in the withheld fica, fwt and swt (and other withholdings like pension, etc) that were taken out of the employees pay.

eastend

don't forget to figure what worker's comp will cost you, since it is based on payroll- could add 5-15% to an employee's salary expense- the owner can opt out, tho.

here in NY, that $2,000 salary will cost about $153 additional in employer match, plus the state and fed unemploym( up to a certain amount of salary)- and add in the worker's comp. ( the comp is not a deduction on payroll, but is a payroll expense nevertheless)