If you have grown your business to the point that you need help to be more competitive, congratulations. Accepting that you need help and not trying to do it all yourself is one of the hardest things for entrepreneurs. However, before you look at hiring of employees, there is much you need to know. It is not as simple as putting out an advertisement, conducting interviews, and agreeing on a salary.
Hiring of employees: 5 tips
There is a lot that goes into hiring of employees. The following are a few tips to help you hire and pay your first employees:
Employer Identification Number
When you hire an employee, one of the first things you should do is get an employer identification number (EIN). An EIN is essential, especially as it pertains to paying your taxes. You will be required to file various documents with the IRS, and it is mandatory to use your EIN. You can easily download the forms you need to get your EIN from the IRS website.
Register with Your State’s Labor Department
Compliance is a significant issue when staffing your business, and registering with your state’s labor department that you are an employer is one thing you have to do. Every state has different requirements, so ensure you check with your specific state.
The registration is particularly important because of paying state unemployment compensation taxes. Every state has a compensation fund that offers short-term relief to those that lose their jobs.
Have a Pay Stub Generation System
An excellent tip to ensure you pay your employees appropriately is to have a pay stub generation system. Many states require employers to provide statements about pay and deductions regularly.
Use a pay stub maker to generate a record of payments for your employees, which is essential. Pay stubs will also reduce employee disputes about pay since it will be clear on the stub. Your staff will have a better understanding of their take-home pay too.
Creating pay stubs for your employees will be valuable, especially when they need to provide proof of income. It will help them in various ways, such as taking out a mortgage, getting a car loan, or renting property.
Understand Payroll Taxes
If you are hiring of employees for the first time, chances are you don’t have a payroll department to help you with payroll processing. You will have to do it all yourself; hence you should understand payroll taxes.
The Federal Insurance Contributions Act holds employers responsible for withholding tax deductions from employees’ pay. The deductions include a 1.45% Medicare tax, 6.2% Social Security tax, and a Medicare surtax of 0.9% for all employees earning more than $200,000 a year.
Having Byte-HR‘s payroll software that helps you automatically withhold the above tax will be tremendously helpful. If you set up a contribution plan for your employee, you will also have to make contributions that match what they make, with which a payroll system can help immensely.
Determine the Job’s Requirements
Before you embark on hiring of employees for the first time, you should clearly define the role that you want the employee to perform at your organization. Clarify the job description and what tasks the employee will do on a regular and intermittent basis. The skills and qualifications you need are what you will be looking for during your hiring process. The clearer the job description, the easier it will be to attract the ideal candidate for the job.
The interviewing process should also be streamlined and straightforward. Background checks are very crucial. Though you will conduct few interviews for your first employee, you should ensure they are quite conclusive.
Conclusion
Hiring of employees can be both exciting and cumbersome. The compliance processes are mandatory, so you need to do them. On the other hand, you are growing your business and making a valuable addition to your company which will make the hiring process worthwhile.
