*This blog post is an excerpt from an article that I wrote for Zenefits. You can find the original here.
There is no more essential task for an employer than payroll. If you have people working for you, they’re going to expect a check at the end of the pay period. And if it doesn’t show, you probably won’t have employees for long.
Payroll can also be one of the most intimidating employer tasks. There are numerous regulations to be aware of, forms to file, and deductions to take. For example, will you deduct health insurance premiums, flex spending, or retirement contributions? How do you withhold taxes, Medicare, and social security? How many hours does an employee have to work before overtime kicks in? And what the heck is a FICA?
With all of these questions and the consequences that come from getting them wrong, it’s no surprise that so many small business owners find payroll to be daunting. But here’s what did surprise us: 25% of small businesses are still using pen and paper for their payroll records rather than investing in a reliable payroll software or accounting service.
Why? Let’s take a closer look at payroll accounting and manual record keeping.
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