When you handle payroll on your own, you can either do everything manually or use software. Regardless of which method you choose, you must start by gathering some information.<\/p>\n\n\n\n
To run payroll for your employees, you first need information such as:<\/p>\n\n\n\n
- Federal Employer Identification Number (FEIN) <\/li>
- Tax rates (e.g., SUTA tax rate<\/a>)<\/li>
- Employee information (e.g., pay rate and withholding information) <\/li><\/ul>\n\n\n\n
Read on to learn about the tasks, time commitments, and costs involved with doing payroll manually and using software. <\/p>\n\n\n\n
![\"how](\"https:\/\/www.patriotsoftware.com\/wp-content\/uploads\/2016\/09\/How-to-do-payroll-yourself-1.png\")
<\/figure><\/div>\n\n\n\n1. Manually do calculations<\/h3>\n\n\n\n
If you\u2019re willing to read up on tax laws and do your own calculations, you might be interested in learning how to do your own payroll. <\/p>\n\n\n\n
Doing payroll by hand is the least expensive payroll option. You don\u2019t have to pay a professional or purchase a program.<\/p>\n\n\n\n
When you manually run payroll, you have full control over your payroll. You know when and how your payroll is completed. But, doing payroll yourself likely means you don\u2019t have someone to check your calculations. There is an increased chance of errors, which are often followed by penalties. <\/p>\n\n\n\n
Doing payroll by hand also takes time. You have to do all the calculations, distribute wages, and file taxes. You could spend a lot of time working on payroll instead of working on your business.<\/p>\n\n\n\n
How to manually do calculations<\/h4>\n\n\n\n
Want to handle payroll solo, without any software? Take a look at the steps you have to follow for manual payroll:<\/p>\n\n\n\n
- Track time\n
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- Use an attendance management method to track employee time. Or, you could have employees track their own time. Then, you can approve it.<\/li>\n<\/ol>\n<\/li>
- Calculate payroll\n
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- At the end of each pay period, use employee time cards and their rates of pay to calculate wages.<\/li>\n
- Include all types of compensation, including any tips and overtime for the pay period.<\/li>\n<\/ol>\n<\/li>
- Subtract deductions\n
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- Begin by subtracting pre-tax deductions<\/a>.<\/li>\n
- Next, deduct employment taxes.<\/li>\n
- Finally, withhold post-tax deductions.<\/li>\n<\/ol>\n<\/li>
- Pay employees\n
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- Distribute take-home pay to employees using your designated method (e.g., direct deposit).<\/li>\n<\/ol>\n<\/li>
- File and deposit taxes\n
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- File and remit employment taxes according to your deposit schedule and form due dates.<\/li>\n<\/ol>\n<\/li><\/ol>\n\n\n\n
2. Purchase payroll software <\/h3>\n\n\n\n
Payroll software<\/a> is a great middle-ground option for doing your own payroll. Online payroll software is relatively inexpensive. Not to mention, the software does all calculations for you, so you don\u2019t have to worry about mathematical errors. <\/p>\n\n\n\n
With payroll software, you remain in control while processing payroll. You get to be in charge, and you know exactly when payroll is done.<\/p>\n\n\n\n
Depending on the solution you go with, there might be a learning curve for you to get the hang of the software. But, you can contact customer support for help.<\/p>\n\n\n\n
Payroll software requires a small time commitment. The time commitment is less than what you would spend on manual calculations. And if you purchase a tax filing service, the software takes care of all tax obligations for you. You won\u2019t have to worry about withholding, filing, and remitting taxes\u2014saving you even more time.<\/p>\n\n\n\n
- File and remit employment taxes according to your deposit schedule and form due dates.<\/li>\n<\/ol>\n<\/li><\/ol>\n\n\n\n
- Begin by subtracting pre-tax deductions<\/a>.<\/li>\n
- Employee information (e.g., pay rate and withholding information) <\/li><\/ul>\n\n\n\n