4 Ways Payroll Affects a Business Maui Hawaii
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How Does Payroll Affect a Business?
Budget Maui Hawaii
o Payroll affects a business by having a direct impact on the business' budget. Payroll that exceeds sales or earnings will cause a business to fail. When a business owner decides to have employees and a payroll, he must review the budget of his business and attempt to estimate the business' income in order to determine what it can afford for payroll. The amount the business can afford to budget for payroll will affect how many employees the business can hire, and the skill level of the employees.
Profits Maui Hawaii
o Payroll can have a direct effect on the profits that a business makes. When a business can afford an attractive payroll, it will attract highly skilled employees who are able to immediately contribute to the company's success. Substantial payroll provides incentive to employees to move product and services, enabling the business to be successful. A small payroll in a business with many employees could hurt the business' profitability by attracting sub-par employees. It could increase training expenses since employees will have a lower skill level, and can increase hiring expenses since the company may experience more turnover from firing employees that don't meet objectives, or from losing employees to higher-paying companies. Conducting a survey of payrolls paid by other businesses in that field will help the business decide what wages keep it competitive.
Some companies may decide to hire part time employees rather than full time employees in order to decrease the expense of paying benefits and decrease payroll expenses. Hiring salaried employees can increase a payroll in the short term but, since salaried employees do not need to be paid overtime (in most instances) it can reduce payroll expenses in the long term, especially if your business is cyclical and results in more man hours worked during certain seasons.
Accounting Maui Hawaii
o Payroll could create the need for a business to hire an accountant or bookkeeper. When a business has a payroll, special taxes need to be paid by the business. The business must pay social security taxes, Medicare taxes, federal income taxes and unemployment taxes. The business will also be able to write off some payroll expenses, thereby reducing some of its tax liability. Paying for employee benefits such as retirement plans and insurance will also result in a tax write off for the company while increase employee loyalty. Hiring an accountant or bookkeeper can assist the business owner in the proper management of payroll.
Consistency Maui Hawaii
o When a business introduces a payroll, it must be consistent in paying the payroll. With payroll comes employees who depend on their paycheck to be ready on a certain day. Payroll creates an agreement between the company and the employees to exchange service for pay. Additionally, the business has a responsibility to pay social security and Medicare taxes in order to assist the employees in living a comfortable retirement.
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Rated Hawaii's # 1 Internet/Online Marketing 2010
