4 Payroll Tax Tips For New Restaurant Owners
If you are in the process of opening up your first restaurant on your own, you need to think about more than just the food; you also need to think about the technical side of running your business. In order to run an effective restaurant, you need employees, which means you need to understand how to set up your payroll. Here are a few tips to get you started.
Make A Budget
The first thing you need to do is create a budget for your restaurant and determine how much of it you can set aside for employees. From there, you need to take into consideration what base pay you want to offer your employees, as well as how much money you are going to have to put aside for both Medicare and Social Security for each employee.
This will help you determine how many employees you can hire in the first place. It is better to start small and add employees as you can afford them.
Obtain An Employer ID Number
The next thing you need to do is obtain an employer ID number if you don't have one yet. You will need this number when you pay your employee's Medicare, Social Security and tax payments to the IRS. You can get this number by simply contacting the IRS; it is a pretty straightforward process.
Determine If You Want To Go Salary Or Hourly
Most restaurants pay their workers an hourly wage. However, some restaurants are asking their clients to not tip and are instead paying their employees either a salary or higher set hourly wage. You need to decide which way you want to go, and base that decision on what you can realistically afford.
If you go the hourly route, you need to purchase software and create a system to keep track of each employee's time. You also need to make sure that you are paying any appropriate overtime as well.
Decide How Often You Want To Pay Your Employees
The next thing you need to do is decide how often you pay your employees. If you are paying your employees on a salaried basis, many salary employees expect to be paid only once a month. However, if you are paying your employees on an hourly basis, many hourly employees expect to be paid on a weekly or bi-weekly basis.
You need to determine how often you can afford to pay your employees and make sure that your cash flow allows you to make your payments on time.
Finally, you need to find an accountant or payroll tax specialist who you can work with. They can help you set up all the paperwork to put your payment decisions into action and make sure that everything you do follows the letter of the law. Check out a company like A & C Accounting & Tax to find a specialist who can help.