Hiring a new employee to be a part of your team includes a bigger responsibility and more duties for you as an employer and you must at all times do what is in accordance with the law. Because hiring is not always easy as it seems and it can be a big trouble if you will not be able to do it right.
For New Businesses:
If you are just about to start your very own , there are some things that you need to accomplish first before you can go on and outsource people that you can pay to work for you.
First, you need to set up a Corporate Entity because before everything else, you must know what business you want to establish. You must also be aware of the rules and regulations applicable based on the identity and classification of your business. Each corporate entity provides different liability protections, and have legal and tax implications for your business.
Now you can proceed to registering your company. This is very important because of compliance purposes based on your location. You need to be fully aware of the regulations existent to where you will open your business because you need to comply to these before you can legally operate. Always check for the guidelines especially regarding employee compensation because not being able to give the right salary and compensation can put you into conflict with the law.
Choose a Payroll Schedule
After processing your employee’s profile, you have to determine your pay period and workweek – this will determine whether your payroll schedule will run on a weekly, biweekly, semimonthly, or monthly basis. Decide what the pay date for that period should be, also known as the ‘check date’, and be sure to make the pay schedule clear to your employees.
Determine the Employee’s Status
Your new worker may not be an employee depending on the services they provide and their level of supervision. If they largely control how they do their work, they may be an independent contractor or consultant, not an employee. If you’re unsure of the nature of your business relationship, consulting the IRS website can help. Once you’ve established the status of your new hire, there are legal forms that need to be filled out at the start of their employment.
Starting with their first day
Contrary to what most people think, your employee’s first day should not necessarily be on the actual workplace doing actual workloads instantly. Instead, they must first accomplish all the forms and paper works required for them to be a legible part of the company unless you can process this earlier, it is not advisable to proceed and let the employee work for you without accomplishing their forms as well as their profile along with its pre-requisite requirements that will be a better proof of their identity. This process is for the safety and welfare of both the employee and you as the employer.
It’s also your duty to come up with a reliable method of tracking your non-exempt employees’ worked hours. Any timekeeping plan is acceptable as long as it is complete and accurate. Investing in an automated timekeeping system means your employees will never have to manually write down their own hours, which will eliminate any confusion when processing payroll.
Whichever method you decide, make sure to set employees up with the proper protocol so they can record their time. If you’re using a biometric system, you’ll need to conduct a one-time supervised enrolment process where your employees’ characteristics are scanned to form a template off which future punches will be matched. If you’re using a digital system and would like them to be able to review their hours and/or approve time sheets, remember to give access to the employee self-service module.
Processing their Payroll
As an employer you’re required to calculate, withhold, deposit, and file taxes for your employees. You will also need to match all Social Security and Medicare taxes withheld, and calculate your employees’ net pay after all taxes are withheld so that their take home pay is correct. As a new business owner, all this may sound overwhelming, but a well-designed payroll software program can help you put your compliance on autopilot and take care of your needs.
Calculating taxes is the tricky part when it comes to doing your due diligence as an employer. Manually doing this can get very confusing. So, you would need to be familiar with the formulas needed to calculate federal income tax, state and local income tax, SSS, PhilHealth, and other employer-paid taxes. Calculating all these taxes each pay period can quickly become a time-consuming task when hone on a daily basis. This is why some companies bypass the headache by either hiring an in-house payroll professional or outsourcing to a payroll company.
Also, thanks to today’s modern technology because it is easier for you to sign up for a payroll software program that allows you to have full control of your payroll while eliminating the complexity.
Depositing these taxes and filing returns is another responsibility for you as the employer. You’ll need to fulfil is depositing the taxes you’ve withheld from your employees’ pay. These may all be due on different dates, with some being due on a quarterly or annual basis, depending on the regulations.
If you use a payroll provider or payroll software program, this service may be offered to you, or you can outsource this specific task. Regardless, you can find assistance in matching these due dates to your payroll schedule, and some programs even deposit the taxes automatically.
