[00:01] how do I run payroll for my business and pay myself and my employees and contractors? So, I currently run payroll for over 80 people for my businesses great tools, tons of really bad tools. And in this video, I'll go through
[00:13] exactly how to run payroll step-by-step the best way possible. So, in the first actually run payroll. In the second part, I'll show you how to set up W-2 then in the third part, I'll show you how to pay contractors on your team. So,
[00:27] this would be 1099 contractors in the US or overseas hires. I'll also go through for so many years. So, yeah, hopefully you guys find this video helpful. So, first of all, why do you need to run payroll? So, anyone with a business, you
[00:39] them, right? The way that you're going to actually do this is through payroll. there to do this for you. Now, for S corporation and C corporation business
[00:51] owners, it is actually required to pay yourself a salary through payroll, reach profitability. So, let's first talk about S corp owners. Running payroll is going to allow you to actually pay yourself a reasonable
[01:03] salary and then take remaining profits as distributions. There are some tax talking to your CPA about it. Yeah, essentially the main thing is you're avoiding self-employment tax on the distribution portion, and it's also
[01:15] necessary to do this once you reach profitability. And it's the exact same if you are an LLC taxed as an S corp. So, right away, if you're an S corp or probably most of you guys are, then yes, you are going to need to run payroll.
[01:28] corporations. For C corps, your salary is deductible to the company. This creates earned income for benefits and it also enables retirement this might have C corporations and yeah, you'll probably need payroll at some
[01:42] point. Now, for single-member LLCs and sole proprietorships, you may not need to pay yourself via salary through payroll and you might not need payroll Because all income is actually just considered self-employment income. So,
[01:55] you can just get paid with a transfer, and then you pay taxes on that personally. So, I'm going to make a whole another video on this exact topic. But, if you are a single-member LLC or sole proprietorship, you may still want
[02:07] achieved through payroll. So, now let's talk about how to actually run W-2 you have. Now, like I mentioned, I've used tons of different payroll softwares. My current favorite is going to be Gusto, without a doubt. But,
[02:21] not that different. Yeah, for me, I just think Gusto has a really solid dashboard set up, and it's just easier for me to actually just run payroll. There are other payroll softwares out there, too, that I use, but they're a bit clunkier.
[02:36] this video, if you haven't set up payroll yet, I just recommend going with below. If you use that link, you'll get the best possible pricing on Gusto, as have. And yeah, I just encourage you guys, if you haven't set up payroll yet,
[02:50] follow along with this video. I'll take you guys through the steps. Yeah, by the how to set up payroll, and you'll have done it, which is pretty awesome. Pricing's all really similar. They have a few different plans, the simple, plus,
[03:03] watching this video, I think the simple plan's going to be good enough. You'll your account. And yeah, essentially, it's going to be a fixed monthly price, that you have per month. I know, I know it's annoying to pay for payroll
[03:16] software, but trust me, it is 1,000% worth it. They handle all the complicated stuff. You don't want to be running payroll yourself, because yeah, just really, really recommend using something like Gusto. So, if you guys
[03:29] take you to this page, and yeah, it's free to set up an account, so I just up your account, you're going to get an email to verify it. So, just enter in all of your information. It's very easy. Click create an account. You'll get an
[03:43] email to verify your account. So, go to your email, click on that link there, your company profile. So, you'll select who your company is planning to pay on Gusto. So, likely it's going to be yourself, right? As a W-2 employee, and
[03:55] it might also be employees in the US. So, select that if that's applicable. two as well, but we'll just leave those blank for now. It's going to ask you how your company currently runs payroll. So, I'll just say that we're new to running
[04:07] different provider, just select accordingly. It's going to ask if your company is registered as an employer with the IRS. So, if you have an EIN don't have an EIN yet, you're going to want to create an EIN with the IRS,
[04:20] which is very, very easy. It takes about 5 minutes, but you can select no for now know that you're going to need your EIN before you actually pay your employees. bank account. Just select accordingly. Have you already hired your first team
[04:33] member? Answer that accordingly. I'll select yes. How many team members in the US are you planning to pay? Put a number right here. You'll select which states your employees work in. So, for me, I work in California, and my employees are
[04:45] also in California, so I'll just select that, but of course select whatever fits other questions. Just feel free to answer them. It is important that you guys answer this truthfully, so make sure to select the correct industry and
[04:57] whatever matches the best. It'll ask if anyone in your company needs track hours select accordingly. As for health benefits to your employees, just select whatever fits. It doesn't really matter too much what you select here. And same
[05:10] thing with the 401k question. If you have workers' comp insurance already, Just click no. Then, it's going to ask you for your desired first payday with Gusto. You don't need to be perfect on this date. Just put an estimated date if
[05:23] absolutely change this later. So, it's going to recommend which plan is going to work best. I recommend clicking on edit. You likely won't need the plus recommending for you guys based on your answers, but for me, I think the solo or
[05:35] simple plan is going to be perfect. If you guys want any add-ons, you guys can select those, but for me, I don't need next-day direct deposit and for any of that stuff, you can deselect them if you don't want to learn more from their
[05:47] you're going to click on start with this package. So now you're going to enter in ask you if you want to add another admin. It's going to have you enter in your addresses, your federal tax info, your bank accounts, direct deposit
[06:00] speed, as well as the pay schedule. So this is all pretty self-explanatory. It through this. There is no payroll software out there that's, you know, you can sign up for in under 5 minutes. This require a certain amount of info, so
[06:13] fill everything out. It's all pretty straightforward. They're going to guide really like about Gusto. Their onboarding process is just really good compared to some of the other platforms out there. And so that's why I recommend
[06:26] is going to be your tax setup and then any authorizations and then you're going paying. So that's going to be your W-2 employees as well as probably for pay structure. So you're basically going to say the pay frequency. So this can be
[06:42] monthly, weekly, or semi-monthly. It'll also ask you if it's salary versus hourly, if there are any overtime rules, any PTO policies, and any benefits. So you just set this up one time, but you can change it later on if anything
[06:55] looking to pay themselves a salary, you're of course going to add yourself, you're going to set your salary amount. It's going to ask you about bonuses and they're basically going to take all this and then invite your team members with
[07:08] very similar onboarding for all the different payroll softwares out there. ones down below in the description. We'll have a full guide for you guys on payroll, but for most of you guys, like I said, I think Gusto is the best
[07:20] first payroll. So things that you're going to need to do specifically is first review your payroll preview, make sure that the amounts are correct, and then basically what Gusto does is they're going to pay you or pay the
[07:34] They're going to pay the IRS and any state taxes that are due. They're going to file any payroll forms and they're going to log everything. And the whole that it's going to do this all compliantly. It gets pretty complicated
[07:47] recommend trying to do this yourself. So, after this, payroll can definitely to have a certain pay schedule that you actually run payroll manually each period if you want. In terms of the
[08:01] ongoing maintenance, there's really not that much you need to do. All the hard your onboarding and set up your first payroll. But, basically, it depends on what settings you have, but essentially for each payroll period, you're going to
[08:14] run. You can add any bonuses or adjustments if anything is needed, and They're going to handle everything else. And then every quarter and also filings. It's going to actually issue W-2s or 1099s to the people that you
[08:30] pay, and it's going to generate reports that you can give to your CPA. These are actually file your taxes correctly. So, Now, there are definitely a bunch of mistakes that a lot of people make when
[08:42] it comes to running payroll. The first is if you're a sole proprietor trying to pay yourself through payroll. So, that's not allowed. All you have to do is do a transfer from the bank account to your own personal one, or you might be just
[08:54] bank account. But, the thing is you don't need a payroll software if you're a sole proprietorship. Same thing if you are a single member LLC that's just people make is they select the wrong entity at sign up. So, during
[09:08] select the correct entity type because that's going to affect all the payroll people will use their personal bank account. You want to definitely use a business bank account to really separate your personal and your business. If you
[09:22] and business, this is going to mess with your liability protection, and trust me, people also don't coordinate with their CPA. As a business owner, you probably have a CPA that you work closely with. Give them a heads-up that you are going
[09:36] to be running payroll. They can give their input on what a reasonable salary financials. But, the whole point here is you do want to coordinate with your CPA. point, a lot of people will set their salary way too low. And if you do this,
[09:50] there is a higher chance for audit. So, definitely just come up with a reasonable salary with your CPA. This will really depend on how much net profit there is in your business. Now, let's talk about how to pay contractors
[10:02] as well as overseas staff. So, basically, the first is that there are tons of different ways. So, you can use Gusto or other payroll software to do this as well. For me, I like to use Deel for my international hires. And I have a
[10:14] pretty sizable international team. So, Deel has really been a lifesaver there. I'll have a link down below to Deel. This is my preferred payroll software that link, you'll be able to check out the different pricing. But, don't be
[10:27] scared of the Deel EOR. Most people that hire overseas do not need this one. It's very likely that you're going to be paying contractors overseas instead. So, Deel's pricing is $49 per contractor per month. This is what I use for my
[10:40] Deel is because they have a bunch of your international hires. So, these contracts are going to change depending example, my contracts in, let's say, Indonesia are going to be different than
[10:54] say for a lot of businesses, it's going to be more expensive to use Deel than opinion, it can be quite worth it depending on where your business is at. Payoneer that you guys can use, too. These are solid, too, but they do offer
[11:09] a lot less support and compliance. So, if you want that like full compliance, Deel's probably going to be your best choice. But, just for paying, Wise and Payoneer are all solid. You can also use PayPal, but I will say they have pretty
[11:22] high fees. The exchange rates are also really, really bad. So, I don't like using PayPal because, you know, the hire, they also don't get as much in the exchange rate. But, I will use PayPal for paying some US-based 1099
[11:34] a fee if you use friends and family. Now, on the topic of overseas talent, if hiring overseas yet, I think you're making a huge mistake. I actually have my own overseas recruiting company called Paired. We find phenomenal talent
[11:48] in places like Indonesia, Latin America, South Africa that can save you up to 80-90% on your payroll costs. Yeah, most of my team they're overseas. I really love hiring across the world and there's just really amazing, phenomenal talent
[12:01] everywhere. You just need to recruit and identify talent correctly and that's you're interested, you guys can book a call, talk to my team and we can see how hundreds of thousands of dollars in payroll each month. So, yeah, that's my
[12:14] whole guide on how to run payroll for your business. It is a pretty complex different stuff, but feel free to just watch this video over again. I encourage you guys to just set up payroll as you watch the video. Again, I'll have my
[12:27] link to Gusto for the best possible pricing on their payroll software. And understanding of payroll, why you need to run it and how to actually do it single resource that we talked about in this video is going to be down below.
[12:41] guys spent a good amount of time with me in this video. If you got any value from it, make sure to like or comment and also subscribe if you want to see more videos about personal finance, business and a whole bunch of educational
[12:54] tutorials. My whole goal is to help you guys live a financially successful life. Thank you so much again and I'll see you in the next video. Peace.