US Payroll – Step 10: Reconcile Each Period
1️⃣ Match Records – Reconcile payroll register with tax deposits & general ledger (GL). 👉 Example: Payroll shows $5,000 tax withheld, but bank shows $4,800 → investigate $200 difference. 2️⃣ Fix Discrepancies – Correct missed withholdings, wrong entries, or bank mismatches right away. 3️⃣ Why It Matters – Ensures accuracy, prevents IRS notices, and keeps […]
US Payroll – Step 9: File Periodic Reports
1️⃣ Form 941 (Quarterly) – Report federal income tax withheld + employer/employee FICA to IRS. (Filed every quarter (April, July, October, January)). 👉 Example: If you withhold $500 in taxes and $300 in FICA, report $800 total 2️⃣ Form 940 (Annual) – Report FUTA (Federal Unemployment Tax) to IRS. 👉 Example: For 3 employees earning […]
US Payroll – Step 8: Run Payroll & Issue Pay Stubs to Employee
1️⃣ Run Payroll – Calculate total pay and deductions, then process payments via ACH/direct deposit or printed checks. 👉 Example: Employee earns $2,000 gross pay – taxes & deductions ($400) = $1,600 net pay. 2️⃣ Issue Pay Stubs – Share detailed breakdowns showing: • Gross Pay • Deductions (taxes, benefits, etc.) • Employer […]
US Payroll – Step 7: Deposit Payroll Taxes on Time (to Federal Taxes (IRS) / State Taxes (State Agencies)
💼 US Payroll – Step 8: Deposit Payroll Taxes on Time (to Federal Taxes (IRS) / State Taxes (State Agencies) 💼US Payroll – Payroll Tax Deposits :- 1️⃣ Federal Taxes (IRS): *Who: Internal Revenue Service (IRS) *What: Federal income tax withholding, Social Security, Medicare, FUTA *How: Electronically via EFTPS (Electronic Federal Tax Payment System) or […]
US Payroll – Step 6: Calculate Payroll Taxes (Per Run)
💼 US Payroll – Step 6: Calculate Payroll Taxes (Per Run) 🧾 What It Means:- Payroll taxes are shared between employees and employers — covering federal income tax, Social Security, Medicare, and unemployment taxes. Example – just like in India where PF (Provident Fund) has both portions (employees and employers). The only difference in the […]
US Payroll – Step 5: Timekeeping & Gross Pay Calculation
💼US Payroll – Step 5: Timekeeping & Gross Pay Calculation: – 1️⃣ Collect Time Data – Get timesheets/timecards for hourly staff or confirm salaries. 👉 Example: Hourly employee logs 45 hours; salaried employee gets fixed pay. 2️⃣ Calculate Gross Pay – Hours × Rate + Bonuses + Commissions + Taxable Reimbursements. 👉 Example: 40 hrs […]
US Payroll – Step 4: Set Up Benefits & Deductions
💼US Payroll – Step 4: Set Up Benefits & Deductions :- 1️⃣ Pre-tax deductions – 401(k), HSA, commuter benefits 👉 Example: Employee puts $200/month into 401(k) before taxes. 2️⃣ Post-tax deductions – Insurance, other after-tax items 👉 Example: $50/month for optional life insurance. 3️⃣ Employer contributions – Company match, benefit share 👉 Example: Employer matches […]
US Payroll – Step 3: Choose Pay Frequency & Payroll System
💼US Payroll – Step 3: Choose Pay Frequency & Payroll System :- 1️⃣ Decide Pay Period – Weekly, biweekly, semi-monthly, or monthly 👉 Example: Most US companies pay biweekly (every 2 weeks). 2️⃣ Select Payroll Software/Service – Automates tax calculations, deposits & filings 👉 Example: Gusto, ADP, QuickBooks Payroll. 3️⃣ Set Up Company Details – […]
US Payroll – Step 2: Collect Employee Documents
💼US Payroll – Step 2: Collect Employee Documents :- 1️⃣ Form W-4 – Federal tax withholding Confirmation from Employee, (plus state forms if required). 👉 Example: This tells you how much tax to deduct from paychecks. 2️⃣ Form I-9 + ID – To verify work eligibility in the US. 👉 Example: Passport, or Driver’s License […]
US Payroll – Step 1: Get Set Up
💼US Payroll – Step 1: Get Set Up :- 1️⃣ Apply for EIN (Employer Identification Number) :- Think of this like your company’s “Tax ID number” from the IRS. 👉 Example: Just like you need a NTN in Pakistan, your business needs an EIN in the US. 2️⃣ Register with State Agencies: – -For state […]