NY Restaurant Payroll Management – The Benefits of Outsourcing Your Payroll Needs
Owning and operating a restaurant in the “Big Apple” can be a rewarding experience – but it comes with its fair share of stress, too! You’ve got utilities to pay for, vendors to deal with, customers to serve… and oh yeah, payroll to manage.
Well, maybe not that last one. Many restaurant owners in NYC have found that outsourcing their payroll to a reputable provider is the way to go. Here’s the big question: Is it the right choice for you? Whether you’re based in Gramercy or the Bronx, here are just a few reasons why payroll outsourcing may be the best option for your restaurant when you have a lot on your plate.
1. You’ve got to set up your business the right way
If you’re just getting ready to open up shop, then it’s important that your restaurant has been properly registered as a business entity with the State of New York and New York City. You’ll need the right certificates, licenses, and permits to legally operate within city limits. And if you’re going to hire employees, you’ll definitely need an EIN (Employer Identification Number) from the IRS.
The point is, it takes a lot of work just to set up a restaurant business in New York the right way. Enlisting the help of a full-service payroll company can help ease the load. Not only will you have more time to focus on establishing your business entity, but your payroll partners can also help you to avoid any pitfalls along the way.
2. Hiring good employees takes planning and effort
Today’s labor market is tough on employers. With so many openings available, and so much competition for top talent, how can you ensure that your new hires will add value to your business?
Good planning and perseverance are key. You’ll need to advertise in all the right places – which could mean social media platforms, your restaurant’s storefront, or both! You’ll also need to offer competitive wages and benefits.
Here again, partnering with an outsourced payroll company (such as Premier Payroll Solutions) can prove helpful. Even if they’re not directly involved in your hiring decisions, these payroll specialists can provide you with some context on competitive salaries in the NYC restaurant sector, and even offer some suggestions on what to include in your benefits package.
3. You want your payroll management to be 100% accurate
Let’s be real: payroll management can be tough for any small business, no matter the industry. In fact, according to one recent Deloitte survey, up to 45% of small business owners say that avoiding mistakes was a primary reason they chose to outsource their payroll.
Think about some of the key payroll activities that need to be handled in order to comply with federal, state, and city regulations:
- Compilation of employee information. Obviously, you’ll need some key pieces of info from a new hire before adding them to your payroll (e.g., their I-9 and W-4 forms, wage notices, their account details for direct deposit, and so forth).
- Pay frequency. In New York City, restaurant employees must be paid weekly, and they must know which day they’re going to be paid. Of course, you can decide to pay employees on a weekly basis, too.
- Wage calculation. This is where things often go wrong for small business owners trying to figure out payroll on their own. When calculating an employee’s wages, you need to first come up with their gross pay for the pay period (including any overtime hours worked). Each employee’s hourly rate (or cash and tip rate) must equal $15/hr, regardless of the size of your business. After you come up with the employee’s gross wages for the pay period, you’ll then need to factor in income deductions and exemptions, like federal, state, and local taxes.
- Filing of tax withholdings. Besides regularly depositing federal income tax withheld, you’ll also need to report your tax withholdings to the IRS on a quarterly basis. You’ll use Form 941 for this, and may also need to file Form 940 for FUTA (Federal Unemployment Tax Act) taxes as well.
Apart from the activities mentioned above, managing payroll on your own means that you’d also need to understand how to comply with the Fair Labor Standards Act (FLSA). For instance, under the FLSA any business with annual gross sales of at least $500,000 is required to pay workers minimum wage and overtime. And you would also be required to inform any employees who receive more than $30 in tips per month if you decide to use the FICA tip credit for employers on your Form 8846.
Obviously, this is a lot to keep up with, and can quickly turn into a drain on your time and energy – yet another good reason to work with a reputable payroll company!
How Premier Payroll Solutions can help
Sometimes restaurant owners fool themselves into thinking that “it would be cheaper” to handle payroll on their own. But the truth is, even a single payroll mistake can lead to costly fines; even a single employee’s misclassification can lead to heavy penalties, and even one late payment to the IRS can lead to big trouble down the road.
If you don’t have the experience or the bandwidth to handle payroll on your own, it’s no cause for shame. Let our team of experts at Premier Payroll Solutions do the heavy lifting for you. We will ensure that all federal, state and local payroll requirements are met, and will regularly compile reports for your examination. Even better, you can count on us to respond to any question or concern promptly (unlike big processing companies that may never get back to you).
We’ve been serving clients in New York City for over a decade now, including scores of restaurant owners. With our local team of experienced experts on your side, you can focus on managing your restaurant, rather than your payroll.
If you’d like to learn more about the services we offer or would like a free quote, reach out to us today. We’d be happy to answer any questions you may have!