When it comes down to it, running payroll isn't complicated; you want to pay your employees on time and pay the government the right amount every time you pay your taxes. We're here to help. We've laid our three key steps to success so that you can be confident that your employees will get paid correctly, accurately, and on time.
Get all of your business and employee information in Wave
Wave Payroll, or any payroll software for that matter, is at its core nothing more than a calculator. The answers that you get will always be correct as long as the right details are entered in the first place.
If you're running payroll for the first time, be sure to gather any tax info for your business to guarantee that from the very first payroll that you run, everything is completely correct and accurate. If you're not sure what information you'll need, you can find it here.
Head to Settings -> Payroll -> Tax Profile. Here’s where you can input any taxes that may affect your business- essentially, the employer contributions! Provided the frequency, rates, and any account numbers are right- you’re good to go! We'll handle the calculations
Each of your employees also has a tax profile called the Tax Details page. You can find it by clicking Employees, and selecting 'edit' next to their name. Let's say a member of your team has just gotten married and their filing status has changed. This is where you would enter that in Wave.
Whenever you're adding a new employee, have them fill out a W4 form (U.S.) or TD1 form (Canada) so that they can let you know their personal tax details before they're added to your business in Wave.
Review the payroll and know what to look for
It’s nearly time to approve your payroll, but before you press that Approve button you still have time to make sure everything on your employees' pay stubs is good to go.
Take a minute to scan the calculated payroll to ensure that everything you added above is now accurately reflected on each employee pay stub. Here’s where you can see how it can affect the "real life" of your business and employees.
It's a good idea to check the tax calculations to see if they look right based on the information in their tax profiles, but you'll also want to keep in mind what happened in the last week or more since your last payroll.
Did any of your employees earn bonuses? Take a vacation? Did you have to reimburse anyone? Reviewing your payroll gives you a chance to make sure that what you see on your employee pay stubs lines up with what happened in the real world.
To add or deduct from an employee's pay, navigate to their employee profile and click Benefits and Deductions.
Approve on time
Paying your employees on time is always going to be everyone's highest priority, but approving on time goes beyond just making sure your employees never get paid late. Running payrolls in line with when they occur in the real world is a key control to keep your tax calculations accurate.
The pay day you choose determines which month a payroll is reported in. For example, you might approve a payroll for days worked in December with a pay day in January. The information on your year-end forms/slips, remittances, and withdrawals is all be based on the pay day you chose. In this example, this means that the pay for the December pay period is going to be reported based on the January payday - not in reporting for the period ending December 31.
Running regular payrolls will keep every payment and filing that you make to the government that much more accurate and consistent.
We all know that tax rates are prone to changing as well. It might be tempting to run one or two payrolls, and just use the same numbers from those to pay your employees with each pay period, but small changes in a specific tax rate can mean big changes in how much is owed to the government, and what needs to be reported. Running payroll every time you pay your employees means you get to let Wave worry about keeping on top of tax rates to that you don't have to.
Finally, if you're paying your employees with Direct Deposit, remember - you'll have to approve Payroll at least three business days in advance of your desired pay day. Keep this timeline in mind so that you have ample time to review each payroll, and make any changes you need before clicking Approve. For further information on direct deposit timelines, please see: Paying your employees on time.
That's it! As long as you've got the three steps above down, you can be confident that every payroll that you run is correct and on time.