FAQ: Can I Do My Own Payroll?

Yes, you can do your own payroll — but it requires time, accuracy, and compliance with tax laws. Many small business owners handle payroll themselves, especially in the early stages. However, you’ll need to carefully calculate wages, withhold the correct taxes, file reports on time, and keep up with changing regulations. Using Payroll Software can make DIY Payroll much easier and help you stay compliant.

Why This Question Matters

Payroll isn’t just about writing checks. It directly affects your employees’ trust, your tax obligations, and your risk exposure as a business owner. Mistakes can lead to penalties, back taxes, or employee dissatisfaction. That’s why many owners wonder if handling payroll themselves is practical — or if outsourcing is worth the cost.

Related Questions Clients Often Ask

• What payroll taxes am I responsible for?

• How do I set up payroll for the first time?

• Should I use Payroll Software or hire a payroll provider?

• How much time does payroll take each month?

• What are the penalties for payroll errors?
  

Actionable Tips for DIY Payroll

If you decide to handle payroll yourself, here are the steps to follow:

1. Register for Employer Accounts

   • Obtain an Employer Identification Number (EIN).

   • Register with state and local tax agencies.

2. Collect Employee Information

   • W-4 forms (federal income tax withholding).

   • I-9 forms (employment eligibility verification).

   • Direct deposit authorizations.

3. Choose a Payroll Method

   • Manual calculation (not recommended).

   • Payroll Software (saves time, automates compliance, and generates reports).

4. Calculate Wages and Withholdings

   • Regular hours, overtime, and bonuses.

   • Federal, state, and local tax withholdings.

   • Social Security, Medicare, and any benefits deductions.

5. Pay Employees on Time

   • Via check or direct deposit.

   • Stick to a consistent pay schedule.

6. File and Deposit Taxes

   • Federal payroll taxes (Form 941 or 944).

   • State unemployment and withholding taxes.

   • End-of-year reporting (W-2s for employees, 1099s for contractors).

7. Keep Records

   • Maintain payroll records for at least four years (per IRS guidelines)【source: Intuit†】.
     

When to Consider Outsourcing

DIY Payroll can work for very small teams, but as you grow, compliance becomes more complex. Outsourcing or using advanced payroll services may save you time and reduce risk.

Next Step

If you’re considering DIY Payroll but want professional guidance, explore our Payroll Services. We’ll help you choose the best option for your business, whether that’s software, outsourcing, or a hybrid approach.