As a restaurant owner, you probably already know what a time-consuming job figuring out payroll can be. Keeping track of an ever-changing staff makes the task even more daunting. To help make the chore easier and ensure you don't miss something, we put together this guide with a checklist.
Even in our modern world of technology, paperwork is still needed. This is particularly true in an industry where employees frequently come and go. The first step in payroll is obtaining an EIN or Employer Identification Number. This identifies your restaurant to the IRS and Social Security Administration. Also, register as an employer through your state's labor department so you can pay the appropriate unemployment taxes. When hiring a new employee, make a file with the following information:
Other required steps in new hiring are:
There are laws that protect employees from poor working conditions and ill-treatment in the workplace. The line-up includes minimum wage requirements, overtime, safety hazards, etc. Knowledge of your state's and nationwide laws is part of owning a business. Stay updated on changes and post required information in the breakroom or office.
It is essential to calculate payroll taxes correctly, as fees and penalties are steep for miscalculations. Employers are required to pay the following taxes:
A tipped employee receives $30 or more per month in tips. Restaurants can count tips as part of the required minimum wage, but tips must comprise at least 8% of the receipts for each pay period. There are many rules about this type of wage that change periodically. Employers check the Department of Labor website for current regulations.
Often, an employer will receive a letter ordering garnishment of an employee's wages. This is typically due to a government school loan in arrears or for back child support. The law requires that the money be withheld from the paycheck and sent to the appropriate agency. There are harsh consequences for ignoring a garnishment by the government, so it is vital to get this done.
Hiring a payroll service is the best way to ensure that the right taxes are paid and that you stay on top of the many requirements. Some payroll services offer different levels of assistance, so look closely at what you need before deciding. If you use QuickBooks Online for everyday bookkeeping, opting for the payroll service ties your bookkeeping together.