How To Run Payroll For Your S Corp - Step by Step Instructions

if you own an S corp are considering setting one up you 'll be wondering how all the payroll side of it works well today I'm going to show you how to set up and run your escort payroll hi I'm Sarah from Collective the formation tax and accounting solution for self-employed people let's dive in the first thing you may be wondering is why running an S corp payroll is so important as an S corp owner you're required to pay yourself a reasonable salary and that must happen through a payroll let's talk about the payroll process these are the steps you need to take to set up your escort payroll step one obtain an employer identification number or Ein this is crucial for tax reporting and you'll need it to run your payroll step two register this employer with your receipts Labor Department you'll also want to ensure you're compliant with your State's tax requirements step 3 set your payroll schedule choose what works best for your business weekly bi-weekly semi-monthly or monthly step four determine a reasonable salary there's no set standard for reasonable salary instead it's based on your unique facts and circumstances step five choose a payroll provider this can be an online service a professional accountant or even a DIY software solution we highly recommend using a payroll provider which will make running payroll much easier now that we've covered setting up your payroll let's talk about actually running it a quality payroll provider will handle most of these steps we're about to discuss but for those of you who want to do full DIY this is what running payroll looks like step one calculate your gross pay this is your salary before any deductions are made step two calculate and withhold your federal income tax we'll use the IRS tax withholding tables to determine correct amount step 3 calculate and withhold FICA taxes these include Social Security and Medicare taxes step four calculate and withhold state and local taxes if applicable these rates will vary depending on your location step 5 calculate any additional deductions or contributions such as Retirement plans or health insurance premiums step 6. deposit withheld taxes with the appropriate government agencies on time this is crucial for avoiding penalties step 7 issue payroll checks or direct deposits to yourself and your other employees on payroll last but not least let's talk about reporting and compliance you'll need to file form 941 quarterly this reports your federal tax liabilities and deposits bioform W-2 for yourself and any employees at the end of the year this summarizes annual wages and taxes available file state and local tax reports as required by your jurisdiction and keep accurate records of all payroll transactions and this sounds like a lot don't worry a payroll provider will file forms with the IRS and your state and remit any required payments on your account and that's it running S Corp payroll may seem daunting but with the right tools you can keep your business and taxes in order and if you need more help running your escort payroll go to collective.com and learn how we can help you with your business formation taxes accounting and payroll if you've enjoyed this video like comment and subscribe below and be sure to check out the resources Linked In the description thanks for watching [Music] foreign

Channel: Collective

Views: 4,087

Keywords: how to run s corp payroll, how to pay yourself, reasonable salary for s corp, reasonable salary for s corp owner, s corp payroll, s corp salary, small business, s corp, s corporation, reasonable salary, payroll, taxes, s-corp, s corporation payroll, setting up payroll for s corp, s corp payroll set up, how to pay yourself from an s corp, entrepreneur, gusto, how to run payroll for s corp

Id: 26BEcKGZqX0

Length: 3min 28sec (208 seconds)

Published: Wed Aug 16 2023