It can be an exciting and daunting time when you’re ready to hire your first staff members. There are numerous things to learn and consider, including how to process payroll, before you can begin to interview candidates and find the ideal employees for your business.
To help you on your way, here are four fantastic tips.
1. Get an Employer Identification Number
The first thing you need to do prior to hiring your first staff members is to register your business with state and federal authorities. The IRS requires any business that has employees to have an EIN, which stands for Employer Identification Number. The number consists of nine digits and is used for tax identity purposes. States have different registration processes for obtaining an EIN, so visit your state’s labor department in person or online to find out the precise procedure.
2. Make Sure You Provide Accurate Pay Stubs
Although you don’t have to provide employees with pay statements under federal law, the majority of states in the US do require employers to provide statements about pay and withholdings regularly. Besides legal obligations, it makes good business sense to ensure you issue paystubs to your staff members. You have a record of payments, which is helpful for tax purposes and any employee disputes, and your staff members have a record of their gross and net pay, including all deductions and contributions. Pay stubs can also be useful for proving income when people need to do things like take out a mortgage, rent a property, or apply for life insurance. Pay stubs contain information like the employee’s name, address, and social security number, the pay rate, the pay period, and net and gross amounts. You can use FormPros paystub maker to quickly make pay stubs.
3. Understand Payroll Taxes
Before you start paying your first staff members, you need to know how to calculate withholdings. Employers are responsible for withholding payroll tax due to the Federal Insurance Contributions Act, which comprises of:
- Medicare tax: 1.45%
- Medicare surtax for staff members who earn more than $200,000 per year: 0.9%
- Social Security tax: 6.2%
Furthermore, you need to cover the employer’s portion of the same percentages of your staff members’ Medicare tax and Social Security. So, you would pay the same percentages for those as above.
4. Determine the Job Role and Know Who Your Perfect Applicant Is
Once you have an EIN and you understand the payroll process and tax withholdings, you can focus on the actual hiring process. You’ll need to determine who you are looking for and what his or her role and duties will be, find applicants through referrals, agencies, or private advertisements, prepare interview questions, and then interview the candidates. The final step is to choose the people you want to hire. Out of those steps, the first is the most important. Once you define the skillset and attributes you want your staff members to have and what their roles will be in your company, it will be much easier to proceed with the other steps and find the ideal person.
Do not forget about the other side of the hiring process — attracting the right people. Of course, you should focus on the way your interview will be conducted, but do not forget to actually show them your appreciation. Employee recognition starts with your first encounter and can have a long-lasting effect on your future collaboration.
Begin by making a list of the most important tasks you need help with. Are you hiring someone for inventory management, a sales role, or serving food? Once you define the job role you can determine the precise duties required and how much you should pay the staff member.
Next, move on to considering what type of person you want to hire. What kind of background does he or she ideally have? How much experience does the applicant have? Does the role require somebody who is outgoing? Make a list of the skills, experience, and attributes your ideal candidates should have and you will be much better enabled to find the right staff member.
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