You may also need to get a state EIN number check your state’s employer resources for more details. If you don’t have an EIN, you can apply for one here on the IRS site. An EIN is kind of like an SSN for your business and is used by the IRS to identify a business entity and anyone else who pays employees. Before you do payroll yourself, make sure you have your Employer Identification Number (EIN) ready. Step 2: Find or sign up for Employer Identification Numbers. Note that there is a new version of the Form W-, so this is the form you should have new hires fill out starting January 1, 2020. For each new employee you hire, you need to file a new hire report. The more allowances or dependents workers have, the less payroll taxes are taken out of their paychecks each pay period. To get paid, employees need to complete Form W-4 to document their filing status and keep track of personal allowances. Step 1: Have all employees complete a W-4 form.
But given all the payroll mistakes you can make (and nasty fines you can incur as a result), make sure you’re completely comfortable with everything you need to do before you dive in. If you’re tax savvy, you may be able to take on a DIY approach to paying your employees. Summary: Doing your company’s payroll on your own costs less, but is time consuming and prone to errors. Get Started How to process payroll yourself
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