As your business grows, hiring and paying employees will enable you to scale your business and focus on activities that play to your strengths. Subcontractors are appropriate for the occasional job that you need to get done, but ultimately they have control over their own activities and are essentially running their own business. Employees are those key workers that have a longer term commitment to your company and follow your approach to getting work done. Your employees receive paychecks based on a salary or an hourly rate that include tax deductions, and they may also receive certain benefits that your company offers such as health insurance and a retirement savings plan. 

As the owner of a corporation, you should also be paying yourself a paycheck as compensation for your work in the company.  C-Corporations get a tax deduction on the salaries paid to their owners whereas other non-payroll distributions from C-Corp profits could be taxed twice as a dividend, once at the corporate level and a second time at the personal tax level.  S-Corp owners are required to pay themselves a reasonable salary, since the company profits are not subject to social security and Medicare taxes, only the salary is.

Employee paychecks are more than just a means for paying employees for work performed during the previous pay period.  They can involve a number of “pay types”, deductions and contributions.

• Salary, hourly or a flat salary
• Bonus/Overtime
• Expense Reimbursements
• Health Insurance payments for S-Corp owners
• Income, social security, and Medicare tax withholdings
• Retirement plan deductions and employer matching contributions
• Health insurance deductions
• Employee loan or cash advance repayments

Delivering biweekly or monthly paychecks to your employees is only one element of the overall payroll process. A number steps have to be completed properly in order to comply with federal, state and local requirements including the following:

• Employee onboarding including having new hires complete a W-4 to determine the correct income tax to withhold from each paycheck.
• Calculating and withholding the correct social security, Medicare, federal, state, and local tax withholdings from each paycheck.
• Paying employee tax withholdings and employer-side taxes on a monthly basis.
• Paying state unemployment taxes on a quarterly basis.
• Filing state and federal payroll tax forms on a quarterly basis.
• Filing annual federal unemployment tax forms and paying the federal unemployment tax.
• Issuing W-2s to your employees.

As you can see, processing payroll and complying with the tax requirements can be an administrative challenge and the penalties for non-compliance can add up.  Holbrook Accounting utilizes state-of-the-art payroll systems that facilitate tracking employee hours, processing paychecks, filing payroll forms, and paying taxes in a smooth process that will give you confidence that all requirements are being met.  Payroll information is also integrated with your accounting books so that employee paychecks and tax payments are automatically accounted for correctly.

We provide online, mobile-friendly tools with self-serve options for onboarding new employees, tracking time worked, and adding bonuses or other additional pay over and above an employee’s normal salary.  Employees have the convenience of downloading paystubs and W-2s on demand.  Integration with employee benefits such as health insurance and retirement plans will further cement employee loyalty.  The payroll solution we offer is in line with our philosophy of taking advantage of emerging tools to streamline your business processes and free your time from administrative tasks.