Your business plan has been thoroughly vetted, financing is in place and you are eager to take your business idea to the public. Whether you plan to have two or twenty on your payroll at the outset, payroll services require compliance with certain requirements of the Internal Revenue Service, the U.S. Department of Labor, the state’s Department of Revenue and Department of Workforce Development and the Social Security Administration.
IRS Requirements
Regardless of the projected size of the business, an Employee Identification Number or EIN is required for each business entity. Applying for an EIN is a straightforward process that can be accomplished by applying online on the IRS website or obtaining a printout of IRS Form SS-4 and filing by fax or mail. For online applicants, an EIN is generated at the end of the session while fax filers may have to wait four business days. A four to five-week wait is standard for those applying for an EIN by mail, so plan accordingly.
The EIN is a nine-digit numeric string that is attached to the tax accounts of employers organized as partnerships, corporations, trusts or sole proprietorships without employees. This number will appear on tax documents, including those issued to employees by payroll services.
After receiving your EIN, you will now have to make arrangements for scheduled electronic deposits of federal income tax withheld and other amounts withheld for Social Security and Medicare taxes. Failure to comply with this requirement can lead to hefty penalties. Consider outsourcing your payroll services to a qualified firm who can guarantee that these deposits will be made in a timely manner.
State of Wisconsin Requirements for Business Payroll
New businesses in Wisconsin are required to comply with requirements of the Wisconsin Department of Revenue. Submit an online Application for Business Tax Registration using form BTR-101 and pay the first-time application fee of $20. You will receive a BTR certificate that is renewable every two years with a renewal fee of $10.
Employers who are required to withhold state income taxes must register with the Wisconsin Department of Revenue for a state withholding account number. Generally, employers must have a state withholding number for the state in which employees reside, creating another complication for the payroll process. However, companies like Wisconsin-based Integrated Payroll Services are equipped for multi-state compliance, so filing and reporting the appropriate state withholding taxes is part of the payroll services package.
Businesses must also register for State Unemployment Insurance or SUI, which is linked to the employer’s place of business. In Wisconsin, application for SUI is accomplished online on the website of the Department of Workforce Development. If your business will have locations outside Wisconsin, compliance with that state’s unemployment insurance requirements is part of doing business in that state.
Other Requirements
Businesses must also comply with Department of Labor guidelines to display labor posters where employees can have access to them. Ensure that your company has adequate business insurance, including coverage for workmen’s compensation.
The back office operations required to ensure that businesses comply with federal and state requirements are complicated. Outsourcing some of these non-core functions to a reliable provider such as Integrated Payroll Services will relieve some of the stress and ensure compliance in the process.