If you are getting ready to open or take over a practice, knowing how payroll works is crucial.
Don’t know the first thing about setting up a payroll? Here are five general tips to help you get started. You should note that these steps are not set in stone. For example, the location of your practice can have an impact on how you set up payroll. If you are purchasing an existing practice, current processes could factor into how you operate.
Five general tips for getting started:
- Request or find your employer identification number (EIN). You will need your EIN number when it comes time to set up payroll. Generally, practices need a new EIN when ownership changes. You can contact the IRS to get an employment identification number. Apply for EIN online.
- Check state and local tax laws. Do you know if your state and/or local government require an ID number to process taxes? If you cannot dig up this information on your own, don’t be shy about contacting your tax professional for assistance or coordinate with the previous practice owner. Remember though you’ll need your own ID number, don’t use the previous practice owner’s.
- Don’t overlook the importance of employee paperwork. If you are hiring full or part-time employees they must fill out a W-4. This will ensure that you are withholding the appropriate amount of federal income tax during each pay period. Employees should also complete a new W-4 when they get married or divorced, have a baby, or want to change their withholding amounts for any other reason.
- Choose a pay period. There are many options, including monthly and bi-monthly. If you are purchasing an existing practice, check with current employees to find out their current method and if it is working. Before you establish a pay period, check with your state for specific requirements.
- Select a payroll provider. This step is optional, but know that a payroll provider can provide you with the assistance regardless of your location or requirements and can help take care of one of the major responsibilities of being a practice owner for you.
The first year of owning a practice is a great time to make sure any previous practices work for you and develop others that help you run things more efficiently. With these five tips guiding you, setting up payroll for a new practice or a newly purchased practice does not have to be a challenge.
This article was provided by SurePayroll -- the only endorsed payroll provider from ADA Business Resources. ADA members receive special member pricing.
For more information visit www.SurePayroll.com/ADA, or call 866-535-3592.