First time running payroll for your small business? Don't mess it up! These four steps will get you on track to run payroll the right way.

1. RUN PAYROLL
In Just 4 Steps!

2. If you're a business owner,
here's the bottom line:
You've got to
run payroll.

3. Running payroll is more complicated than it
sounds, especially as a small business owner.
Follow these 4 steps to
get your payroll program
off the ground.

4. STEP ONE:
Getting Ready to Run Payroll

5. To run payroll, you need your state new employer
information to register your business.
Use our handy map to find the
information for your state!
FIND MY INFO

6. Once you've registered your business, you'll get a
federal employer identification number (FEIN).
You use the FEIN to pay employer payroll
taxes. You'll also enroll in electronic payment
systems for federal and state payroll taxes.
12 56 53 3462

7. Don't forget to collect employee
information! You'll need:
Pay rate or salary
Hours worked
Time‐off taken

8. STEP TWO:
Calculating Payroll Amounts

9. To calculate how much to pay employees, ask:
Is the employee hourly or salaried?
Are they eligible for overtime pay?
Once you've answered these questions for
each employee, follow these formulas to
calculate payroll amounts:

10. HOURLY EMPLOYEES
CALCULATION
# of Hours
Worked
Pay Rate
Gross
Pay=

11. SALARIED EMPLOYEES
CALCULATION
Annual Salary
# of Pay Periods
per Year
Gross
Pay=

12. OVERTIME CALCULATION
Pay Rate
x 1.5
Overtime
Pay=
# OT hours
worked( )

13. STEP THREE:
Payroll Taxes & Other
Deductions

14. You need to deduct payroll taxes
(income tax, Social Security,
Medicare) from employee pay.
Read this to get the full
explainer on payroll taxes!
READ NOW

15. Depending on your employee benefits
package, you may need to take other
deductions from your employee's paycheck.
Other deductions could include:
Health Insurance
401(k) Deductions

16. STEP FOUR:
Paying Your Employees

17. To calculate exactly how much to put on your
employee's paycheck, follow this formula:
Payroll Taxes +
Other Deductions
Net Pay=
Gross
Pay ( )
*
* a.k.a. the amount you put on the paycheck

18. Once you've calculated your
employee's net pay,
you're ready to pay them!
You can pay employees using either
paper checks or direct deposit.

19. CONGRATULATIONS!
You just ran payroll in 4 steps!
(Now, go celebrate with some ice cream.)

20. Learn how to avoid
the most common
payroll errors:
DOWNLOAD NOW
DON'T MESS UP PAYROLL.

21. Free payroll training,
right in your inbox.
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