Processing Payroll And Hiring Employees For Start-ups
While setting up a business, an entrepreneur is likely to have many questions in his mind. Establishing a new start-up may be a challenging process. In order to avoid losses in the business and to ensure the smooth functioning of the business, the entrepreneur should think of practical ways that will help in processing payroll and hiring employees for startups.
In this article, we will learn how to start processing payroll and hiring employees for startups. We will also look at the steps to follow for processing payroll and hiring employees for startups.
How To Start Processing Payroll And Hiring Employees For Startups?
When a new company is established, processing payroll and hiring employees for startups is the first thing done. India is the 5th greatest economy worldwide and the opportunities for business entrepreneurs are constantly expanding in India. For a business to grow in India, it is essential to have a good payroll system. Implementing an effective payroll system would ensure everything from wage payments to payroll tax submission by storing accurate accounting records. Workers are the backbone of the business, allowing it to expand and succeed. Processing payroll and hiring employees for startups is a crucial task to ensure efficient company management.
Important guidelines for processing payroll and hiring employees for startups-
- Recruit Employees– when a business is established, the first thing is processing payroll and hiring employees for startups. In order to hire workers, the employers do the following- post a job and describe the job role nicely, screen applicants, conduct interviews, and finally hire.
- Classify The Workers In Groups– an employer has to group the workers correctly on the basis of full-timers, part-timers, contractual basis, etc. This will assist the recruiter in handling payroll as well as paying payroll taxes.
- Register EIN– Employer Identification Number (EIN) is a specific identification number assigned to businesses, and non-profit organizations, by the IRS to report taxes and acquire licenses. EIN is necessary for processing payroll and hiring employees for startups.
- Select An Effective Payroll System– A good payroll management system simplifies the payment procedure and tax submissions. There are 3 types of payroll administration systems for startups-
- Manual payroll system
- Payroll management software
Five Steps To Recruit Employees
With ample job opportunities in a growing economy like India, getting potential candidates to recruit can prove to be troublesome. Entrepreneurs may have to offer more incentives and benefits in order to attract qualified personnel. Here are five great steps a startup can take to recruit potential employees.
- Post A Job And Describing The Job Role– One of the most important tasks for a startup is posting the job and defining the job role. Whenever a job is posted it is important to specify the job criteria. This will help people with the necessary qualifications and skills to apply for the post.
- Find Qualified Employees– In order to hire employees, you will have to look for candidates who are qualified to be a part of our team. Social media platforms, posting job opportunities, and working with a recruiting consultancy are some of the ways to find the right candidate.
- Knowing The Laws– Individuals should be aware of the various laws like laws relating to employment discrimination. This will prevent an organization from posting any discriminatory thoughts while describing the job role.
- Conducting Interviews– The interview is the most important step for recruiting. After getting applicants for the described job, the recruiter can shortlist candidates and schedule an interview. An interview helps a startup to find the best possible candidate for the job role. It might include various steps including giving tasks to the candidate, doing negotiations relating to payments, etc.
- Hiring Process– After conducting the interview and checking all the necessary information like doing background checks, checking facts and references, etc, the candidate is finally hired.
Instructions for setting up a payroll
For a business to operate smoothly, processing payroll and hiring employees for startups is necessary. Payroll processing entails more than just paying your employees. Computing overall wages, withholding deductions, filing employment taxes, and keeping financial records are all part of payroll processing.
To set up a payroll management system, the following instructions have to be followed.
- Obtain Employee Details– An employer must have its worker’s data as the employer is accountable for submitting the employment taxes. The following details of the employee are necessary while setting up a business-
- Employee Name
- Employee Aadhar Number
- Employee PAN details
- Date Of Birth
- Address Proof
- UAN number
- Declaration Application
- The data listed above, as well as a few more depending on state laws, is necessary while entering workers’ detail to process payroll.
- Organize The Workers- It would be beneficial to bifurcate the workers into different categories based on whether the worker is a full-timer, a part-timer, a salaried, or a contractual worker. Organizing would simplify the process for a company that uses an automatic payroll management system to perform the necessary calculations.
- Register For TAN– submit an application (Form 49B) for a Tax Deduction and Collection Account Number. It is a ten-digit alphanumeric code assigned by the Income Tax Department. This is needed by recruiters who deduct or obtain tax at source. TAN can be generated either online or offline.
- Generated UAN– a UAN might be needed while entering the PF details. Therefore, if the workers do not possess a universal account number (UAN), one should be generated for them. And if the workers already have a UAN, that can be used by the recruiter while entering the PF data.
- Determine The Pay System– In India, it is absolutely necessary to define the CTC when starting a business. Cost To Company (CTC) includes the overall cost that a business would incur on a worker over the course of an entire year. Other factors like paycheck per month, bonuses, and other incentives that the business pays for are included under CTC. while defining the pay structure of the company, it should clearly lay down the various CTC components.
- Decide On A Payroll Management System– A payroll management system is the method by which corporations pay salaries to their workers. Payroll management is time-consuming and a long process for HR Departments. Hence, start-ups will have to decide whether to choose the outsource payroll technique, the manual payroll technique by hiring an accountant or buy payroll management software. The Payroll Management Software is the most reliable system for payroll. Payroll Management Software is automated and thus, speeds up payroll processing for the entire workforce. It reduces the possibility of errors. Purchasing payroll software is more cost-effective and secure than other techniques of payroll systems.
- Be Aware Of The Tax Filing Deadlines– since an employer is supposed to file employment taxes, it is important for the employer to remember the deadlines for filing taxes. Even if a startup uses payroll management software, it is important to be aware of the tax submitting dates because the laws and guidelines regarding tax of the government keep on changing.
The above article describes the method for processing payroll and hiring employees for startups in a simple way. It explains that having an effective payroll system and good employees would help the company to achieve success.
If you have more queries on processing payroll and hiring employees for startups. You can consult Odint Consultancy for more guidance. We will be happy to solve your queries.
It is crucial for startups to handle payroll and hire employees for smooth management of the business.
A payroll system is a method that a firm uses to pay salaries to its workers and to submit employment taxes.
The payroll management software is the best to use. The payroll software allows an organization to control the workers’ financial records conveniently and accurately. Moreover, it is cost-effective and secure.
Azhar Ansari is a company formation specialist with 8+ years of expertise in international business. Financial planning, risk management, and other related areas.