Updated: Sep 27, 2022
Are you ready to hire some help for your small business but not sure where to get started?
Here are some tips for getting started in the hiring process.
1. Create a clear job description.
Make sure you are clear about the type of person you want to hire, the skills they require, and the amount (or the range) you are willing to pay. Keep an accurate record of each candidate throughout the hiring process, including their strengths, weaknesses, expectations, and interview notes. You'll need to refer to this again when selecting your preferred candidate.
2. Determine who is doing the recruiting
How much time will it take to recruit each new employee? Think about all the tasks involved, including:
writing the job description
advertising the job (online and offline)
communicating with prospective candidates
answering questions about the job and your business
interviewing and screening applicants
communicating with unsuccessful candidates.
You may not have time to do all of this. It might be more efficient to outsource this to someone in your team or a recruiter.
3. Apply for an Employee Identification Number
Obtain your Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This is also known as an Employer Tax ID or Form SS-4. It would help if you had this to pay taxes and send other documents to the IRS. You can apply for an EIN online. This is a tax number that you as the employer have to set up to run the business – it isn't something you need to get for each employee.
4. Maintain accurate tax records
You are legally required to keep proper tax records for four years. It would help if you kept them safe, secure, and easily accessible. Your accounting software should be able to do this for you.
The right accounting software will also help you monitor your business's financial and tax status in real-time – for example, by keeping track of deductible expenses. Deductible expenses are business expenses that can be claimed to reduce your overall tax bill.
5. Keep track of withholding taxes
The IRS needs to know the yearly income for each of its employees. So your company is required to withhold money from each employee's paycheck (withholding tax) to ensure that your employees can pay their taxes at the end of the financial year.
These forms must be completed:
W-4 form
Each employee has to fill out a W-4 before they start work. You use this information to help figure out the amount of withholding tax for each of your employees.
W-2 form
As an employer, you need to report your employee's income to both your employee and the IRS. This is done with a W-2 for full-time employees. It includes their taxable income, retirement contributions, and benefits.
Each state has a separate tax form, so make sure you check you have the right one for your condition.
6. Remember critical dates and tasks
Here are the essential IRS-related dates and tasks you need to remember:
By 31 January
You need to send a W-2 form for each employee to the IRS. This includes state taxes, and – depending on the state where your employees are located – you may be required to withhold state income taxes.
By the end of February
A copy of each completed W-2 must be sent to Social Security Administration. This information is used to calculate each employee's wages for the previous calendar year.
Within three days of hiring a new employee
You must complete an Employee Eligibility Verification form (I-9) and keep a copy on record for three years. The employee should achieve this with the employer signing and dating it.
Within 20 days of hiring a new employee
You need to contact your state's New Hire Reporting Program. Each state matches new hire reports against other public records to ensure accurate payment and receipt of public assistance – welfare, food stamps, and Medicaid.
During the calendar year
You must also file an IRS Form 940 – also called an Employer's Annual Federal Unemployment (FUTA) Tax Return – if:
you paid wages of $1,500 or more in any quarter, or
An employee worked for you in 20 or more different weeks of the year.
Funds from the FUTA tax help pay unemployment compensation to workers who lose their jobs.
The IRS has a handy online calendar for businesses you can use for reminders.
These tips and ideas are from the website:
https://www.xero.com/us/resources/small-business-guides/checklists/hiring-employees/, check out the website for the full article, so you don't miss out on crucial steps!
There are several legal, organizational, and professional steps you will need to take to hire employees. Don't rely solely on these online resources; make sure you follow all laws in your state. And remember that your hired help are only humans; they will need sick days, vacations and may ask to take some time off. Make sure you have a backup plan in case of something unexpected. It's always stressful to lose an employee, but you don't want the event to shatter your business!
The way you treat your employees is essential! If you would like to keep them, treat them with respect just as you want them to treat you. Please don't act like you're above them because you're hiring them. If you've had a job where your boss was like this, you know exactly how it feels. You won't be willing to work for this employer very long. You may only work at a place where your boss doesn't treat you fairly for the money. You would be actively looking for employment elsewhere! This is not the situation you want to put your employees in.
Be the boss you want to have. So many jobs out there have awful bosses; there's enough of that going around, make a difference. Of course, you may get upset with an employee that doesn't seem to take their job seriously, doesn't show up for work, or any number of things that can be highly frustrating. Even in those situations where you must let an employee go because of no fault of your own, and that ended up meaning you had to pick up extra work, you can't have a bad attitude. Keeping that attitude can be very difficult for anyone.