Small business payroll is an important yet complex process. Whether you're a first-time business owner or an experienced veteran, understanding how to handle payroll can be intimidating. Small businesses manage their payroll taxes differently than larger businesses, and they need to have a thorough understanding of government rules, regulations and filing requirements.

The most important step in managing a small business payroll is accurately tracking employee hours. Proper tracking will be essential for figuring out gross wages and accurately determining employee deductions. Depending on the kind of work your employees are doing, you may also need to properly classify them as either exempt or non-exempt under the Fair Labor Standards Act.

Once you’ve tracked employee hours, you will need to determine appropriate pay rates. Even if you have non-exempt employees, you may need to consider special salary requirements if they qualify for overtime. After you’ve set the appropriate pay rate and other deductions, like taxes, you’ll need to submit the payroll tax returns to the IRS and any other applicable state or local taxing agencies.

Small business owners may also want to consider using an online payroll system or an outsourced payroll provider to streamline their payroll processing. This will help automate some of the more complex tasks and allow you more time to focus on other important business matters. Many online payroll systems are designed specifically for small businesses, and can help you save time and money by automating calculations and payments.

No matter the size of the business, payroll is a complicated and critical process. Proper tracking and filing can help you stay ahead of government regulations, while also ensuring you make accurate payments to your employees. For those businesses that choose to invest in an online payroll system or outsourced service provider, the right solution can help streamline and simplify the payroll process.