Building a business can feel a lot like laying tile. Each crew, service, and job must be painstakingly overseen and exist on a strong company foundation–all held together by the grout of your essential business functions.
Setting up a proper payroll process ensures that you:
- Pay employees accurately and on time
- Comply with tax laws and regulations
- Review accurate, timely payroll data–leaving you with valuable insight into labor costs and your tiling company’s overall financial health
But like tiling, it’s important to make sure that your payroll process is well-laid, with no cracks or gaps that could cause problems down the road. Not sure where to start? We’re here to help!
This guide will cover everything you need to know to establish a seamless payroll process for your tiling business. From understanding the basics of payroll taxes to implementing time-tracking and compliance, we'll break the process into easy-to-follow steps to help you lay a reliable foundation for your payroll.
Payroll Basics for Tiling Businesses
Effective payroll management is crucial to the success and growth of your tiling business. It ensures accurate and timely employee payments, compliance with tax laws and regulations, and provides valuable insight into labor and materials costs.
However, tiling businesses often need help with payroll management because of the unique challenges you face within your line of work. When it comes to managing crews with varying pay rates and schedules, it can quickly begin to feel like you’re dealing with a lineup of 1099 contractors rather than internal employees.
Accurately tracking time and attendance across multiple job sites using time clocks can also be a struggle. Additionally, staying compliant with local and federal tax laws and labor regulations and integrating job costing with payroll can be complex tasks, especially if you have employees working across multiple states.
But when you master payroll, you’ll improve your budgeting skills, keep your teams and crew happy, and minimize compliance risks and penalties. This will let you focus more time on your job sites and win new business.
Pro Tip: Our Connected Payroll network can help you find trusted local insurance brokers in our Connected network and secure the best mod rates for your business. We don't generate mod rates ourselves; they are reported to us as the payroll provider and then used to pay accordingly, saving you additional time and effort.
With these things in mind, let’s explore a step-by-step process to help you set your payroll process up for success.
6 Steps To Mastering Payroll For Your Tiling Business
Mastering these six key steps can help you build a strong foundation for your tiling business’s payroll process.
1. Understand Payroll Fundamentals
To set up a successful payroll process, you must first grasp the key components of payroll, including wages, taxes, deductions, and compliance regulations.
Wages are the foundation of payroll, and you'll need to determine appropriate pay rates that comply with minimum wage laws and overtime pay requirements. As an employer, you are also responsible for withholding and paying federal, state, and local taxes, such as income tax, Social Security tax, and Medicare tax.
Deductions, like health insurance premiums and retirement plan contributions, must be accurately calculated and managed to ensure correct paychecks and fulfill your obligations as an employer. You must also familiarize yourself with the legal requirements and regulations specific to your location and industry–including workers' compensation and unemployment insurance.
Finally, correctly classifying your employees as full-time, part-time, or independent contractors is crucial, as each classification has its own set of compliance requirements for payroll taxes and benefits.
2. Establish a Payroll System
After grasping payroll fundamentals, the next step is establishing a payroll system tailored to your tiling business. You can choose between handling payroll in-house or outsourcing to a small-business-focused payroll provider.
In-house payroll offers complete control and can be cost-effective for smaller businesses. But managing payroll in-house requires a keen eye–as you must regularly do your homework and stay current with tax laws and regulations. Outsourcing payroll puts time back into your schedule to focus on projects and ensures compliance.
When selecting a payroll provider, be sure to ask about their payroll software. You’ll want to consider factors like:
- How easy the payroll program is to use–for you and your employees
- Whether or not you can integrate the software with accounting programs like Quickbooks
- Popular features like direct deposit and automated tax filings
Once you’ve selected a payroll provider to work with, you’ll need to provide the following information to get started:
- Gather necessary information to open the account, like your business’s EIN or TIN and business bank account information
- Choose pay periods and dates for your team
- Set up software or engage a provider
- Enter employee information and configure pay rates, deductions, workers’ compensation details, and possibly benefits information
- Set up your first payroll and review it for accuracy
- Run the payroll by distributing paychecks or through direct deposit
- File and pay payroll taxes on schedule if you aren’t working with a payroll provider who will complete this portion for you
3. Integrate Time-Tracking and Job Costing
Accurate time tracking directly impacts your payroll, job costing, and business’s overall profitability. Implementing a user-friendly, digital time and attendance system helps you accurately track employee hours across multiple job sites.
Job costing incurs specific challenges like managing variable labor costs and accurately allocating expenses to individual projects. By integrating time-tracking with job costing, you get insights into the actual costs of each project so you can better budget and price future jobs.
At ConnectPay, our time and attendance tool lets employees clock in and out easily from their mobile devices using geofencing technology. This data automatically syncs with your payroll–eliminating the need for manual data entry and reducing the risk of errors.
4. Manage Employee Benefits and Deductions
A competitive benefits package can help attract and retain skilled workers for your tiling business. Consider offering health insurance, retirement plans, and paid time off for full-time and part-time employees to build your internal team. Remember that 1099 contractors are not eligible for employee benefits, as they are considered self-employed.
Accurately recording benefit deductions ensures correct paychecks and helps you avoid overpaying or underpaying for benefits. By working with a small-business-focused payroll provider, these amounts are reported and then processed accordingly. Together, you can regularly review and update records to account for employee benefits or deductions changes.
Compliance with benefits regulations and reporting requirements is crucial to avoid legal issues and penalties. This includes providing required notices, filing necessary forms, and adhering to applicable laws, such as the Affordable Care Act (ACA) for health insurance.
5. Process Payroll and Stay Compliant
Processing payroll accurately and staying compliant with tax regulations is essential for the smooth operation of your tiling business.
Handling tax withholdings, filing, and remittance is also vital to payroll compliance. Regularly review and update your tax tables to ensure accurate withholdings. File quarterly and annual payroll tax returns and remit taxes to the appropriate agencies by the required deadlines.
To maintain payroll records and compliance, follow these best practices:
- Keep detailed records of employee information, pay rates, hours worked, and deductions
- Store payroll records securely and maintain them for the required length of time
- Regularly review and audit payroll processes to identify and correct any errors
- Stay informed about changes in tax laws and regulations that impact payroll
6. Optimize Your Payroll Workflow
To maximize efficiency and minimize errors, continuously analyze and optimize your payroll workflow, looking for ways you can. Implement process automation to save time and reduce errors.
Automate tasks like tracking time and attendance, wage calculations, pay stub generation, and tax filings. This automation frees up time for more strategic aspects of your business and reduces the risk of costly mistakes. The right small-business-focused payroll provider can complete all of these tasks for you–so you can refocus on growing your business.
You may also want to regularly review and update your payroll procedures to accommodate changes as your business grows. Regularly run audits to identify bottlenecks or inefficiencies, and stay informed about new payroll technologies and best practices by attending industry events, reading blogs and related industry information, and consulting with professionals.
Pro tip: As a tiling business owner, you might want to specifically focus on reports like Labor Detail Report and the Labor Allocation Summary Report to gain insights into labor costs across projects and identify opportunities to optimize your workforce.
ConnectPay: The Best Payroll Partner for Tiling Businesses
ConnectPay is the ideal payroll provider for tiling businesses looking to streamline their payroll processes and stay compliant with ever-changing regulatory laws. Our platform is easy to use and built for small businesses–making it the perfect choice for busy tiling professionals. And, with ConnectPay, you only pay for the features you need–without any hidden fees or long-term contracts.
Our clients in the tiling industry love key features like:
- Our time and attendance tool that allows workers to easily clock in and out from their mobile devices using geofencing technology, ensuring accurate time tracking across multiple job sites and providing accurate job costing data
- Our robust HR Resource Center that puts tiling business owners directly in touch with HR experts and compliance resources, helping to navigate the complexities of managing a workforce across multiple states and a wide range of pay rates
- Our experts are trained to help you process Certified Payrolls to ensure compliance with prevailing wage requirements on government-funded projects
Ready to see how ConnectPay and our related features can transform your payroll process? Schedule a free Payroll Tax and Compliance Review today. Are you ready to simplify payroll?
