Calculating Pay:
This is where you figure out what to pay each employee. It includes their regular wages or salary, but also factors that effect payroll that you need to pay attention to are…

• Sick days and vacation time
• Reimbursements for business expenses
• Overtime hours
• Bonuses or commissions

Withholding Taxes and Deductions:
This is the most complicated part. As an employer, you are legally required to withhold a portion of each employee’s paycheck for various taxes and other deductions. This money is then sent to the government or other organizations on behalf of the employee. These deductions include…

• FICA taxes (Social Security and Medicare)
• Contributions to a retirement plan (like a 401(k))
• Health insurance premiums or other benefits
• Federal, state, and local income tax

Reporting and Remitting Payments:
After you’ve calculated the net pay (what the employee actually takes home), you have to do two more things…

• Report: You must regularly report the withheld taxes to the IRS and your state’s tax agency.
• Remit: You must send those withheld tax funds to the proper government agencies on a specific schedule. This is a critical step, as failing to do so can lead to severe penalties

Ready to trade your financial worries for peace of mind? We’re here to help. Reach out to PSACPA today for a friendly chat about your accounting needs. Let’s work together to make your business finances simple, clear, and calm. Call (301)-879-0600 or email contact@psacpa.com