Professional Bookkeeper and QuickBooks Certified Consultant

Copyright 2007 Bookkeeping R Us All Rights Reserved

 Are you confused by all the acronyms used for payroll?  Here a few of the most common and what they stand for.

• EIN- Employer Identification Number which is issued by the IRS upon request.  This should be issued for every company, but is mandatory for any company with employees.

• SSN- Employee’s Social Security Number which is issued to any employee who is legally eligible to work in the United States.

• W4- The form filled out by a new employee showing the employee’s name, address, social security number and the marital status of the employee as well as the number of dependents he/she wishes to have their FIT based on. This form is kept on file by the company.

• W2- The form an employer issues to every employee at the end of each calendar year or if the employee leaves during the current year at the end of their employment.  This form shows the company’s name, address and EIN number as well as the employee’s name, address and SSN.  It also lists the wages earned that are subject to FIT, FICA and state withholding and the amounts withheld.  This form may also include such items as deferred deductions such as employee contributions to pension or retirement plans and employee health benefits withholdings as well as other withholding or income items that affect the employee’s taxable wages.  This form consists of several copies, one for the Social Security Administration, one for your state, employee copies for Federal, state and if appropriate local government filings and copies to be kept by the issuing company and the employee.

• FIT– Federal Income Tax.  This refers to the Federal Income Tax withheld from an employee’s paycheck. This tax is based on rates set by the IRS and is affected by an employee’s marital status and number of dependents.

• FICA– Federal Insurance Contributions Act which includes Social Security and Medicare tax withholdings from an employee’s paycheck.  The Social Security portion is applied to 100% of an employee’s wages, however the Medicare portion is applied only to the amount of wages set and changed yearly by the IRS.  The employer is required to match the total amount of FICA taxes withheld from each employee.

• SIT– State Income Tax which refers to your state income tax withholding from an employee’s paycheck.  These withholdings are based on rates set by each individual state.  Some states do not have income taxes for individuals.

• SUTA- State Unemployment Tax Act.  This is a tax that the employer pays and is based on your state’s rate per a stated amount of wages per employee.

• FUTA- Federal Unemployment Tax Act.  This is an employer paid tax that is based on a stated wage per employee and the rate may be adjusted based on the amount contributed to your state fund.

• 941- A Federal form filed quarterly to report wages paid, FIT and FICA wages withheld as well as the employer’s contributions to FICA, and the dollar amount of deposits made and the dates these deposits were made.

• 940- A Federal form filed yearly to report wages paid, amount and date of state SUTA contributions made and any FUTA deposits made during the calendar year.

Please refer to the IRS and your state’s web sites or publications for Federal, state and local rules and regulations to determine the current rates in effect, when and how to make your deposits and what reports are required and their due dates.

Employees & Payroll | No Comments »

Copyright 2006 Bookkeeping R Us All Rights Reserved

Typically there are two nervous people in an interview – the person being interviewed and the person conducting the interview. You the employer, however, can overcome these jitters and the result will be a “great interview” for both of you.

As with any other task, preparation is the key. You go in cold and you will fumble through the process, forget to ask key questions and will not be relaxed enough to hear what is being said between the lines. After all almost all prospective employees have done some home work on what to say in a standard interview. You need to go beyond the expected and dig a little deeper if you want to hire an employee who will really shine.

Before the interview takes place, however you should carefully review all the resumes submitted in response to your job offer. What are you looking for? Besides name, address, job and education experience look for several other items. Neatness, spelling, and a sense that the person is being honest should be part of your first scan. Are there empty periods between jobs or has the person not stayed at several jobs for very long? These are signs that this might be a problem employee. Does their education and/or job experience fit your requirements? Do they have a life outside of work – that’s why we ask for hobbies, interests and membership affiliations. After all a person who is dull, uninterested, only associates with fellow workers often means an employee who will show up at work, do the job and only the job defined and then leave. Unless you are looking for just a body to fill a slot then this is not the type of employee you want.

Now, prior to the interview, check all the references given on the resumes that you find interesting. And now you are down to a much smaller group of people who you would like to meet.

Try to schedule your interviews in the morning, when you will be fresh and not bogged down by everything that might have happened during the day and your interviewee is also likely to be fresh. Mid-week is always better than Mondays or Fridays.

And prepare, prepare, prepare! Make a list of standard questions that you will ask each and every potential employee. And then a sub-list of questions geared specifically to each individual. Remember the goal is not just to determine the work and education qualifications of a person, but to get to know them. What do they like to do, what is it that really bores them? Do they like getting into the nuts and bolts of a situation? Do they feel comfortable at social gatherings or public speaking or are they more likely to be a quiet introverted type? While experience and education are certainly important it is often the personality fitting the position that makes or breaks a good hiring.

And if appropriate, have the prospective employee meet some of your employees and don’t forget to get feedback from both the interviewee and your current people. But remember the final decision is yours to make.

Do not get fooled by someone who has all the answers at their fingertips, they may be very practiced in interviewing but really are less than honest vs. a person who has to think about an answer or two. And lastly if you find a person who you really feel comfortable with but might have less qualifications or perhaps have a less than perfect job record then don’t be afraid to take a chance. You can always offer then a trial period where you can both try on each other.

Whatever your decision when you finally make an offer, put it in writing. The written job offer should include a job description, starting date and end of trial period if it is part of the offer, salary or wage, descriptions of hours required, a copy of the employee handbook or company rules if available and a list of benefits including paid time off allowances. If a trial period is in play, then the terms of the trial period should be clearly stated in the written offer. Include salary or wages paid and benefits offered within the trial period if they are to be different than those paid when the job becomes permanent. Also include a detailed description of what will determine whether the trial period becomes a permanent job offer. This will eliminate misunderstandings down the road.

And your last task is to send out letters thanking those who you did not hire. After all, you might want to consider then in the future.

Employees & Payroll | No Comments »

Copyright 2006 Bookkeeping R Us All Rights Reserved

Whether you are just starting out and need to hire an employee for your new business or your business has grown and the need for help is eminent, there are several things you need to know before you jump into the hiring process. This series of articles will provide you with the information you need to meet this challenge and avoid the pitfalls.

First let’s define an employee. The IRS defines an employee as a person you hire whose work is controlled by you including both what is done and how it is done. Whether you pay this person hourly, daily or weekly or by the job are immaterial. Both part-time and full time employments are included in the definition.

An employee differs from a sub-contractor. A sub-contractor will work for more than one client, have a defined business, advertise for work, have signage, have general liability insurance and perhaps workman compensation insurance, will have a business phone, business cards, stationery and contracts. A sub-contractor will also make their own hours, determine the work to be done and will provide their own tools and materials necessary to perform the work. If none of these criteria are in play, you are hiring an employee and thus need to meet all of the reporting and legal requirements of an employer.

Now you have made your decision to become an employer, where and how do you find a quality employee? You have several options available to you. Word of mouth, advertisements, your state employment agency, private employment agencies, local colleges and schools, professional and trade associations, friends and family are all good sources. Which you use – and you might use more than one source to find your dream employee – will depend upon your community, your network of associates, your budget and of course the type of employee you are looking for.

Next we will discuss the mechanics of a good interview.

Employees & Payroll | No Comments »

Copyright 2006 Bookkeeping R Us All Rights Reserved

QuickBooks users have the option of three payroll solutions. But how do you know which is appropriate for your company? To help you make this decision here is a brief description of what each of the solutions provides.

The Basic Payroll solution will allow you to prepare and pay up to three employees, automatically download tax rates and calculate your federal and state payroll tax liabilities. An optional direct deposit is also available. This is the perfect solution for small companies who wish to produce their payroll in house but would like the availability of current tax rates and the assurances of knowing they are correctly paying their tax liabilities.

The Standard Payroll solution allows you to automatically calculate payroll taxes and deductions based on the data entered. You can also download the latest federal payroll tax tables and forms and have them filled in automatically with your QuickBooks data. Just print, sign and mail and you are done. Offer direct deposit to your employees, and manage all your payroll functions from a single screen. This is the solution for those who want a hands on processing function with the added assurance of having your payroll processed by the premier accounting software company- QuickBooks.

The Enhanced Solution adds the ability to download your state payroll tax tables and forms and have them filled in automatically with your QuickBooks data. This solution also provides additional features such as Workers’ Comp tracking and calculation of net-to-gross amounts. You can also E-file and pay your payroll taxes at no additional charge (Requires QuickBooks 2007). A solution for companies that want to keep payroll in-house but also have the ability to offer direct deposit, track Worker’s Comp data and file and pay payroll taxes through an E-file solution.

Want the advantages of outsourcing your payroll without incurring expensive monthly fees while retaining the control of printing your own payroll checks or using direct deposits? Then Assisted Payroll is the solution for you. Giving you all the benefits of the Enhanced Solution with the added advantage of having your government tax reporting and liability payroll tax payments done for you with a guarantee to be on time and accurate this solution will give you peace of mind. The folks at QuickBooks will handle all IRS and state tax agency payroll issues for you while you still maintain control of your day-to-day payroll.

All of the above solutions include set-up and usage support by QuickBooks’ experienced and professional team of experts. With Basic, Standard and Enhanced solutions you receive Callback support via a web request and with the Assisted solution Live phone support is available.

So whether you are a small company with only a few employees or a large company with many employees there is a QuickBooks Payroll Solution for you that makes processing your payroll a breeze, helps you meet all your governmental tax reporting and saves you time by entering your information once directly into QuickBooks.

Employees & Payroll | No Comments »