Need to learn how to do payroll. Or do I?

[Steve Griffin]

Looking for advice on methods for a small woodshop to handle payroll for one or two employees.

For 10 years I've had my local temp service handle my payroll. I'd call in my employees hours they did the rest, except for workers comp. Technically, they were the temp service employees.

They charged 19% to do absolutely everything but the workers comp., which I thought was a great deal.

But they can no longer do that, thanks to listening to the advice of a lawyer.

SO-- Should I suck it up and learn how to do payroll myself (something I would hate every second of as I'm already overloaded with work).

OR get some software? (I use Mac)

Or use an online payroll service?

Or hire a bookkeeper?

Or see if I can find employees who will work just to hear my jokes and fashion advice?

Thanks for any help!
-Steve

[Jeff Monson]

Steve, I'm in the "hate payroll" camp also. I bit the bullet a few years ago and started doing it myself. I have 5 employees to pay, it takes me about 20 minutes from start to finish. I have efficiency bonuses to calculate so that takes up at least 5 minutes.

If they are paid hourly, how do you handle time cards?? I have a simple Lathem time clock, they can be had easily on Ebay. Swipe cards for the employees, thus figuring out hours worked is very simple. Its an easy to use system that works on your PC.

I use Quickbooks for the rest of payroll, once you have your employees set up, its just a matter of inputting hours worked and bonuses if applicable. The software does the rest.

I do all my own bookwork, except for quarterly taxes and end of year taxes. My accountant handles these things for me. I have saved a ton of money in the last 12 years by doing it myself.

[Zach England]

Are the jokes funny and the fashion advice hip? This really changes the equation.

[Scott T Smith]

My wife uses a service called Paychex for her veterinary practice. They take care of payroll, quarterly reports, filing the taxes, 401K plans, etc. She likes their service a lot.

[Larry Edgerton]

I used a payroll service, but they have a flat fee instead of a percentage. A lot less than 19%! If you think about it there is no reason that it should be a percentage, its exactly the same amount of work no matter how much you are paying the employee.

My wife does it now in kahoots with my accountant, so it costs me less. Maybe....

There are so many general contractors out of work around here that I have been hiring them as subs and 1099'ing them, they provide proof of insurance. I can pay them a lot more and get better help. Downside is that you have to be very careful you don't hire a weasel who would steal your customer. I'm careful, but I still keep them away from customers if at all possible.

No one hates paperwork more than I! I love the little thing at the bottom of Jeffs posts. That is exactly how I feel about it.

Larry

[Todd Burch]

When I had my business, I didn't make enough to be able to even pay myself, so I never ran into that issue. ;) Had I, I probably would have hired it out.

My dad hired a bookkeeper for his business before it bellied up. He had upwards of 20 employees at one time.

[Marion Abken]

+1 . . . . . . . . . . .

[Steve Griffin]

Thanks for the ideas guys.

I'll investigate quickbooks and paychex. Any alternatives to quickbooks? (I've heard more than one person say they don't like it)

Larry--that percentage was that high because they payed the employer paid taxes too.

[Bob Lloyd]

I hate all paperwork, except when depositing checks! If you could find out about how long it takes and what you would be saving by doing it yourself you could arrive at a cost per hour of your time - then decide.

[Steve Griffin]

I hate all paperwork, except when depositing checks! If you could find out about how long it takes and what you would be saving by doing it yourself you could arrive at a cost per hour of your time - then decide.

Exactly my plan. I figure if doing payroll works out to more than twice my normal pay rate for shop or design time, I should probably do the paperwork. Otherwise, I'll happily pass the chore on to others.

[Joe Pelonio]

I have done it both ways, but when I got up to 4 employees decided to pay the flat monthly amount (per employee).
They had an online system I used to report the hours and delivered the checks to the shop on paydays. Well worth the cost.

[Mike Harris 2]

Exactly my plan. I figure if doing payroll works out to more than twice my normal pay rate for shop or design time, I should probably do the paperwork. Otherwise, I'll happily pass the chore on to others.

Steve, you might want to check out Intuit Payroll as well. Very cost-effective and easy to use. They offer a 30-day free trial, also.

[Belinda Barfield]

I use Quickbooks and love it. I don't, however, use it for payroll. I set up my own payroll system/spreadsheets in Excel and that works for me. Check with your bank. Our bank offers payroll with direct deposit for a flat fee for up to 100 (I think) employees. It's something like $40 per month. I'm thinking of switching. Included in that is monthly payroll tax deposits.

[Phil Thien]

Until a year or two ago, we used QuickPay, from Intuit. IMHO, Intuit figured they could get more money by going to an online solution, and killed QuickPay.

Since then, we have used a package from Medlin. www.medlin.com (http://www.medlin.com).

It seems to work pretty well, and it is fairly inexpensive. They have a demo you can download.

[Steve Griffin]

And the winner is: Intuit. Thanks MR Harris the second!

I'm set up to run my first payroll next monday with them, using the 3 months for $20 trial.

So far I'm very impressed at how nice the website walks you through all the steps. Just the sort of hand holding someone as clueless as me needed.

Thanks again for all the ideas!

-Steve

[Scott Shepherd]

Just know up front Quickbooks payroll costs have doubled in the last 2 years. When we started with it, it seemed like a fair deal since it wasn't much involved. Now, 2 years later, and double the cost, it's got us looking for alternatives. Not much else doubles in 24 months, price wise, so it seems far out of whack, more like a bait and switch scheme than a fair deal.

[Andrew Joiner]

For 10 years I've had my local temp service handle my payroll. I'd call in my employees hours they did the rest, except for workers comp. Technically, they were the temp service employees.



Steve, Are they now your employees? Do your insurance costs go up now?

[Steve Griffin]

Steve, Are they now your employees? Do your insurance costs go up now?

Yes, I have officially "hired" my own employee. W4, I9 taken care of and first payroll happens monday. So far the most time consuming thing has been registering an account with the state. The Intuit website told me of the need to do this and even provided Idaho contact info.

I don't think my insurance costs go up at all. I've always been paying workers comp based on employee costs, and liability based on income. I guess I will be paying unemployment now, but I was always paying that via the temp service fees.

-Steve