payroll

A Payroll Guide for Restaurant Owners

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A thriving restaurant operates like a finely-tuned machine. Each employee carries out their specific tasks to keep the entire operation moving forward at a steady pace.

As a restaurant owner, you need to make sure you’re fully staffed so all the cogs in your machine keep moving. Depending on your restaurant, you might need to employ quite a few cooks, dishwashers, servers, bussers, bartenders, and other positions. And each employee will likely work different hours at varying pay rates, making payroll difficult.

In this blog post, we’ll provide tips for efficiently managing payroll in your restaurant.

You withhold and pay taxes for your employees

Withhold and paying taxes on behalf of your employees is one of your main responsibilities as an employer. Each new hire needs to complete the correct paperwork before they start so you can determine the right amount of taxes to withhold. As they work and earn income, you’ll need to collect their taxes and keep on-going and accurate records.

Tips are taxable income

While all businesses need to keep accurate employee tax records, it can be more difficult for restaurants since tips are considered taxable income. Your wait staff and bartenders need to declare what they earn in gratuities so none of their income goes unaccounted for.  

It’s good practice to have a straight-forward policy on how tips are managed in your restaurant. You can brief your staff members on the policy when they’re hired so they’re clear of the expectations from then on. You can learn more about how to manage and account for tips in your restaurant in this blog post.

Keeping the right employment records

You’ll find that keeping the right records on each employee makes managing payroll much easier. The forms they complete when hired, the amount in tips they report, and records for each pay run can all be stored in the cloud. Cloud document storage keeps your office free of clutter and makes it easy to find and access the right documents when you need them. When it comes time to file your taxes, you’ll be able to easily find the information you need instead of digging deep into a filing cabinet.

Use cloud payroll software

One of the best ways to simplify your payroll responsibilities is to implement cloud payroll software. Different cloud-based systems are able to connect and share data, automating many of your back office responsibilities.

In the case of payroll, each employee can enter their hours and the tips they earned into the system. The software will automatically arrange for each employee to be paid and update your staff and accounting records.

Does your restaurant need help managing payroll or implementing cloud payroll software? BookKeeping Express (BKE) can help!

6 Trends in Employee Management and Payroll

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Extra time is a scarce resource when you’re a business owner. Managing all your day-to-day responsibilities keeps you plenty occupied, leaving little time to keep up with the latest developments in business management and technology. But it’s vital to think about the big picture and consider new ways to make your business run more efficiently.

In this blog post, we’ll explore the latest trends in employee management and payroll technology. Modern payroll software has many advantages that allow for employers to engage with their staff in new ways. Here are six trends in employee management and payroll all business owners should know:

1. New types of employees

It’s becoming more common for businesses to hire employees on a short-term or part-time basis. These types of workers can help out during busy times or provide the necessary skills for specific projects. However, these new types of employees are often given different compensation and benefits than full-time employees.

Classifying these employees correctly and keeping the proper records has become much easier than it once was. Using modern payroll software, you can easily add temporary employees and set them up to be paid accordingly.

2. Outsourcing to 1099 contractors

Like short-term and part-time employees, 1099 contractors are becoming a popular alternative to hiring full-time staff. There are some major differences between 1099 contractors and W2 employers, including how income tax is withheld.

Cloud payroll software allows you to classify contractors and employees correctly, so you can avoid issues with the people who work for you and the agencies you pay taxes to.

3. Staying compliant

Every business is required to provide specific information to the IRS in order to comply with tax regulations. And the responsibility has grown in the past few years with the Affordable Care Act taking effect.

The good news is cloud payroll software helps business owners with their tax requirements. It can calculate what you owe in taxes and auto fill the necessary forms for you. You can then e-file the forms online, often directly from the payroll software.

4. Connect payroll and accounting software

More and more businesses are continuing to adopt cloud software since different systems are able to connect and share data. For example, after your staff gets paid, your payroll software can automatically update the general ledger in your accounting software. It can also connect with your HR system and update the benefits accrued by each one of your employees.

5. Access for your staff

You’ve probably experienced employees asking about how many hours they’ve worked during the pay period or the number of PTO days they have available. Keeping track of these details used to be difficult for employees but they now have this information at their fingertips.

Your employees can access your payroll software and get a complete view of their hours, wages, benefits, and more. They’ll only have access to their own personal information so no sensitive company information is at risk.

6. Automate pay day

Paying your employees is traditionally quite the endeavor. You have to calculate the correct hours, wages, and withholdings for each employee and ensure everyone’s final pay is absolutely correct. You also need to meet very specific deadlines so checks and direct deposits are prepared in time for pay day.

The process is now much easier. Your employees can enter their hours into your cloud-based payroll system and it will automatically calculate everyone’s correct pay. All you need to do is review the details and make sure everything is accurate.

Advancements in technology are changing the way people work and get paid. By taking advantage of the capabilities of cloud payroll software, you can save time and have the confidence that your business is meeting its employment and tax responsibilities. You can also hire different types of workers that meet your business’s specific needs and know they’ll be compensated correctly without any extra work on your end.

BookKeeping Express (BKE) provides payroll services for small and medium-sized businesses. We can set up a modern, cloud-based payroll system for your business and help you manage it. Visit our payroll features page to learn more.

 

The Difference Between 1099 Contractors and W-2 Employees

By Mariah Venus  Email Mariah

As bookkeepers, we often have clients ask us about the difference between a 1099 contractor and a W-2 employee.  It’s actually a pretty straightforward question to answer: Employees who you pay either hourly or by salary should receive a W-2, while an employee you pay based on a contract with a defined term should receive a 1099. The decision to make an employee a W-2 or 1099 contractor should be determined by the needs of the business and the future plans for the employee. An employee cannot be both a 1099 contractor and W-2 employee at the same time.  

For employers, determining the classification status of employees and clearly communicating this status is important for taxation. For a W-2 employee, the employer withholds the taxes and sends those taxes to the IRS and state. For a 1099 contractor, it is the expectation that the employee will pay the appropriate taxes themselves (both employee and employer amounts) to the IRS and state. Employers will need to have a W-4 and state withholding tax form on file for W-2 employees. The W-9 is the form needed to hire a 1099 contractor.

Click here for a more complete definition of a 1099 contractor.

Although the responsibility for withholding and paying taxes is different, the employee responsibility for under- or over-payment of taxes is the same. For example, if the employee with a W-2 has pre-determined percentages of each paycheck withheld by the employer and the IRS determines that the amount was too small at tax time, the W-2 employee will still have to pay the difference. For the 1099 contractor who was responsible for paying estimated taxes throughout the year, if the IRS determined the payments were too small, that employee will also have to pay the difference.

Remember, BKE can help you know what questions to ask, keep you informed of important updates and advise you on what’s right for your business.