The Leavenworth Times - Leavenworth, KS
Hiring your first employee
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A small business with 10 or fewer employees may spend up to $2,600 per year on direct labor for payroll, according to SurePayroll.
Sept. 30, 2013 11:31 a.m.

Tip of the Week

For small-business owners, hiring a first employee is a significant milestone — one that directly affects the company's growth, future success and culture.

When you're getting ready to make that first all-important hire, keep some guidelines in mind:

Understand costs

It's important to weigh carefully the benefits of hiring against the related costs. According to the Small Business Association, these can include: Wages and taxes, including unemployment, Medicare and Social Security taxes; workers' compensation insurance; recruiting and training expenses; benefits; payroll management; and equipment, including software licenses and data plans.

Seeking candidates

You'll need to consider where to advertise for candidates, what professional requirements you'll want them to meet, what wage you'll offer and how you'll handle the interview process. In addition to reviewing candidates' resumes and references, a comprehensive pre-employment screening may include a background check, drug screening, behavioral assessments and skills testing.

Prepare for payroll

A small business with 10 or fewer employees may spend up to $2,600 per year on direct labor for payroll, according to SurePayroll. What's more, if you don't know or understand tax laws and requirements, you could find your company facing IRS penalties. Online services such as SurePayroll handle all the calculations for paying employees; calculating, paying and filing federal, state and local payroll taxes; and notifying tax authorities of new hires.

Next steps after hiring

You'll need to complete a New Hire Reporting form that helps state and federal agencies track down parents in regard to child support payments. The IRS requires all companies also keep employment tax records for at least four years. Additional post-hiring tasks include verifying the employee’s eligibility to work, securing workers’ compensation insurance, establishing a bookkeeping system and fulfilling your obligations under your state’s new hire reporting program.

— Brandpoint

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