The first step is to get a federal identification number from the Internal Revenue Service as well as a state identification number from the state revenue department. You also need to obtain a payroll tax publication from the state your business is in.
The benefits to your employees will be paid by way of payroll withholding.Steps Required to Set Up a Small Business Payroll System
One of the more recent entrants to this increasingly crowded stage is payroll: more and more organizations are making the move form disparate local, national or regional payroll systems to one global payroll operation, centralized and optimized and yielding significant cost savings. 1.;Optimizing local payroll operations
It's all very well to make grand plans for optimized, perfectly smooth global payroll operations, but if your processes are a mess at a local level you've got little to no hope of moving everything global without a great deal of heartache.
"There's a range of issues to look at including payroll efficiency, costs, risks (are any of the country operations dangerously dysfunctional, or are there compliance issues?) performance, supplier relationships and so on," says Keith Rogers of Webster Buchanan Research, a market research and consultancy company focusing on people management and multi-country payroll. 2.;Ensuring compliance
No matter how pressing the cost drivers – or any other motive – no organization can afford to move to a global payroll system if this involves risking a lack of compliance with accounting legislation in any of its countries of operation – and of course this includes the audit requirements posed by Messrs Sarbanes and Oxley (SOX).
However, improved technology, increased familiarity with the shared service center concept (particularly the rise of "hub-and-spoke") and the rise of global outsourcing providers have all combined to ease the way to a compliance-friendly payroll model. 3.;Getting the right balance between optimized global processes and local flexibility
Combining elements of the two aforementioned points, it's vital for organizations to achieve a healthy balance between getting the global system optimized and retaining the necessary flexibility at a local level. There's no point having ultra-pared-down software running a super-Lean global payroll system if local legislative and cultural idiosyncrasies, and rapidly fluctuating employment terms, mean your operators have to go outside that system for a high proportion of their activity.
The need for gold-standard reporting is of course one of the major drivers behind a move to a global payroll system.
Implementing global payroll doesn't come free (but then what does?). Up-front costs aren't limited to the system acquisition and implementation, however: your global payroll organization is going to need new infrastructure including at least one and more likely (thanks to the ever-present requirements of contingency planning) a number of centers, and some training costs are frankly unavoidable.
Taking these cost factors out of the equation too is of course a significant driver towards outsourcing – in all areas of business, not just payroll. 6.;Ensuring employee confidentiality
Data protection is always a critical issue, and especially so in the payroll arena thanks to the sheer number of employees whose data needs to be protected.
Outsourcing global payroll doesn't mean these concerns aren't still of great import to an organization; however it does mean that the organization's ability to control matters is somewhat reduced since much of the data processing is happening outside the organization itself.
The relevant metrics for a global payroll operation don't vary significantly from those used to measure the success of payroll on a smaller scale (although of course that doesn't mean they're any less relevant). 9.;Prioritizing geographical transition
Again, the precise structure of an organization's global payroll operation depends on a great many factors.
In Jeannette Hibbert's opinion, "the ideal solution is to have a centrally managed global payroll, split regionally, with at least one subject matter expert in each country (depending on levels of automation).
For those organizations looking to outsource global payroll this is all somewhat less of an issue.
About The Shared Services ; Outsourcing Network (SSON)
More information visit the Shared Services ; Outsourcing Network (SSON) website.
Intercomp Global Services are payroll delivery specialists with an extensive client base of more than 420 companies, including businesses listed among the Fortune Global 500. Intercomp Global Services supports payroll processing in countries located in Europe, the Middle East and North Africa, Asia Pacific, and the Commonwealth of Independent States (CIS).
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