Once you’ve got your employees hired and their I-9 and W-4 forms are filled out, it’s time to make an important decision…do you do the payroll duties yourself or outsource through a payroll company? One Fat Frog Restaurant Equipment is here to help you make that critical decision.
It really depends on the size of your restaurant and the number of employees you have. If you have, say, over 15 employees, it’s best to go through a payroll company. If you have a smaller operation, you should do it yourself or assign someone else in-house the duties. If you do decide to do payroll in-house, here are some tips, courtesy of One Fat Frog Restaurant Equipment…
• Some locations utilize an integrated computerized system to track hours. If that’s the case at your location, easy. Just print out the reports. If you use time cards, give yourself plenty of time to do all of the adding. Resolve and discrepancies accordingly.
• If you do use a computerized system, make sure you confirm hours and pay rate yourself and with employees. Sometimes data can be entered wrong.
• Calculate gross pay, take out taxes and Federal Insurance Contributions Act (FICA) contributions for each employee. Give yourself plenty of time to do this and double-check the math. If you’re going through a payroll company, they will commonly calculate the amount of withholding tax, Social Security deductions, and all that other fun stuff for you.
• Tally up the full amount of net pay (the amount owed after all the withholding taxes and such are taken out) that you owe your employees.
• Transfer the payroll deposit from the operations account (the account you pay the bills from) to the payroll account. Commonly, both accounts are held at the same bank, so you can call to have it transferred or do it online.
• Print a separate check for each employee and make sure that each check details the number of hours the employee worked, gross pay, and all of the deductions. If you’ve got a direct deposit system in place, bravo.
• Establish a scheduled time, usually between shift changes when the majority of your employees are on site, to distribute checks.
• Decide on a payroll period – either weekly or bi-weekly. There’s really no right or wrong payroll period. Pick the one that works best for you. Once you set a pay period though, stick with it. Not paying employees is a tell-tale sign your restaurant is going under. Employees notice this quick so pay up.
It’s also important to decide on salary or hourly wages. Both have their advantages and disadvantages, although hourly wages is pretty standard in the restaurant world.
When salary is used, it’s typically reserved for general managers, assistant general managers, accountants, bookkeepers, floor managers, bar managers, the maitre d’, cashiers, controllers, kitchen managers, chefs, and sous-chefs.
Hourly rate is usually reserved for line cooks, prep cooks, dish staff, wait staff, bussers, food runners, host staff, bartenders, cocktail servers, and barbacks.
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