Montana Payroll: How to Do It Right
Have you ever wondered how to do payroll in Montana? Or what steps do you have to take in order to do payroll legally? Or maybe you are curious about whether or not you need to register your business as an employer with the state. This article will answer all of these questions and more, providing you with information that is both relevant and easy to understand. If you’re wondering how to do payroll in Montana, this guide will provide clear answers regarding the entire process.
Paying employees
Outline hours worked by the employee each day and divide by two. For example, if the employee works from 8 a.m. to 5 p.m., there are 10 hours worked for that day and you would need to pay the employee $10 for that day of work even if their paycheck stub says $8 per hour
– so then you would round up your payment amount which is $11 in this scenario.
Selecting who is covered
Employees who are exempt from overtime laws, not covered by retirement benefits, and can be terminated without cause at any time should be classified as executive, professional or administrative. Employees who are exempt from overtime laws and can only be terminated for cause should be classified as managerial. Employees who are covered by retirement benefits should be classified as either salaried employees or hourly employees, based on their typical hours.
Getting information from workers
– The employer will pay the employee for the work done in a certain period. This is most common at the end of each calendar month and is often called monthly pay. The amount paid usually matches the hours or days worked during that pay period.
– Employees will fill out a form called an I9 before they start working. You need this form so that you can verify the employee’s identity and eligibility to work in this country.
Form 1099, W-2, and W-4
A 1099 form is generated for anyone who was an independent contractor (not considered an employee) during the previous year and received a total of $600 or more. A W-2 form is generated when a company employs someone as a regular, full-time, salaried worker during the previous year and they have withheld payroll taxes in full. To complete your W-4 form, you’ll need the employer’s name, address, and tax identification number.
Tax withholding versus estimated tax payments
In a nutshell, your taxes will be withheld for you if you work for someone else or make less than $13,000 per year. Otherwise, you’ll have to make estimated tax payments when you file your federal and state tax returns. If you don’t make any estimated payments during the year, chances are good that the IRS will want some of what they’re owed come April 15.
Filing returns
Payroll taxes are used by the government to collect money for retirement and unemployment benefits, state and federal employment programs, as well as workers’ compensation insurance. Before you can calculate your payroll taxes, you need to figure out what type of employer you are. This includes registering with the IRS (if required) and your state agency (if required). There are several different types of pay periods that an employer may have including hourly rate, daily or weekly; as well as salaried positions.
