New Business Basics: Payroll Presented by Emily Palmquist with - - PowerPoint PPT Presentation

New Business Basics: Payroll

Presented by Emily Palmquist with Oasis Outsourcing

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To train, mentor, and assist returning military, National Guard and Reserve members, and their families in addition to our nation’s Veterans as they start and grow small businesses.

Transitioning Military Skills Into Small Business Success

OUR MISSION

A recognized 501c(3) nonprofit organization founded and operated by Veterans in 2004

Missouri * Iowa * Kansas * Nebraska

All Branches Welcome

New Business Basics: Payroll

Presented by Emily Palmquist with Oasis Outsourcing

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Webinar Agenda

• FEIN
• W2 or 1099
• Offer Letter
• New Hire Packets
• Pay Schedule
• Pay Options
• Taxes
• OTHER ITEMS to consider at start up

Company Set Up

FEIN

The Employer Identification Number, also known as the Federal Employer Identification Number or the Federal Tax Identification Number, is a unique nine- digit number assigned by the Internal Revenue Service to business entities operating in the United States for the purposes of identification.

Company Structure

C-Corp, S-Corp, LLC, Nonprofit, Sole Proprietorships Tax payments and company structure differ under each umbrella

Advisors

CPA will help you decide what type of business model is best, handle your taxes and advise you on federal laws that apply to you. Bankers will help with any financial needs and advice.

Types of Employees

1099 W2

• Contract or limited work basis
• Mostly self directed work
• May have flexible hours
• Paid an hourly rate
• Not entitled to benefits
• Uses own resources to do work
• Pays up to 50% of earnings year end
• No Federal Tax deductions
• Work can end at any time
• Hired as an employee, set schedule
• Employer dictates work
• Works when company says to work
• Paid an hourly or salaried rate
• Eligible for benefits
• Company resources available
• Pays tax based on IRS limits
• Federal Tax deductions
• Employee can resign/ be terminated

Employee Hours and Pay Structure

Offer letter

Document provided to employees at time of hire detailing pay, hours and company data

Hourly or Salaried

• Hourly is paid a rate per hour and is eligible for overtime
• Salaried is paid the same amount for 40 hours per week, has a guaranteed schedule

and is NOT eligible for overtime

• The Department Of Labor determines if work is hourly or salaried

Full Time or Part Time

• FT is more than 30 hours per week and up to 40 total hours
• PT is up to 30 hours per week

Exempt vs Non-exempt

Non-exempt employee: The FLSA requires that non-exempt employees in the

United States be paid at least the federal minimum wage for all hours worked plus

• vertime pay at time and one-half times the regular rate of pay for all hours worked over

40 hours during a workweek.

Exempt employee: The FLSA provides an exemption from both minimum wage and

• vertime pay for employees who are employed as bona fide executive, administrative,

professional, and outside sales employees. The FLSA also exempts certain computer employees.

What’s In A New Hire Packet?

Wage Forms

• State tax
• Federal tax
• Direct deposit or pay cards, depending on state

I-9

• State ID required
• I9 completed through E-Verify in some states
• Site employers must keep all I-9 data in a locked cabinet away from the public

W-4

• employee federal tax withholdings
• can not be stored in same file as I-9

Job Description & Schedule

• Please have them sign the job description and keep it in their file
• Explain who the employee reports to

Company Handbook

• Please have them signed that they received it, give them a copy

How To Determine Your Pay Schedule

Pay Schedules

Pay schedules determine how often you pay employees and/or contractors. Many states have pay schedule frequency requirements for employers, which can be dependent on the size of the company and the industry

• Weekly
• Bi-Weekly
• Semi-Monthly (1st and 15th or 15th and Last Day)
• Monthly

Wage Payments & Deductions for Employees

Gross Payroll is the total amount of money an employee is paid prior to deductions. Net Payroll is what is in the employee’s check after deductions are taken. Taxes

• State tax
• Federal tax
• Social Security
• Medicare
• 940/941/1094/1095

Garnishments

• Will be declared by the debtor or state entity-child support, alimony, student loan default, unpaid taxes, etc.
• I9 completed through E-Verify in some states
• Site employers must keep all I-9 data in a locked cabinet away from the public

Other deductions

• Benefits
• 401k
• Other checking/savings accounts

Taxes

Social Security=6.2% Completed at 132,900 in 2019 Medicare=1.45% Federal Unemployment 0.6% up to $7,000 ($42/employee) State Unemployment Ex: MO-2.38% new business rate, stopping at $12,000 in wages Local Taxes Ex: St. Louis City-1%

Compliance

Posters Payroll records Employee information

Other Items to Consider

Work Comp Vacation Pay EPLI Coverage 401k Options ACA Status Handbook Benefits Administration Human Resources Help

VETERANS QUESTIONS?

Maggie Peterson Administrative Director, AWE Program Manager Veterans Business Outreach Center, Region IIV Peterson@vetbiz.com 314-531-8387 www.vetbiz.com

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