Online Payroll Services for Small Business

Most small businesses start payroll with software and a spare hour on a Friday. It works until something changes. A new hire lives in another state. Your tax liability crosses the line that moves you to a semi-weekly deposit schedule. A contractor you've paid for two years starts working set hours on your equipment. The software keeps calculating paychecks, but it won't tell you any of that has happened, and the IRS notice arrives months later.

Monily's payroll services for small businesses cover the full cycle. We run each pay period, deposit federal and state taxes on the right schedule, file the quarterly and annual returns, and post the results to your general ledger. You approve payroll. We handle everything that comes after it.

A mid-year move works as well, provided each employee's year-to-date wages, taxes, and deductions are loaded before the first pay run, so their W-2 covers the whole year.

When payroll runs in one system and the books are kept in another, someone has to carry the numbers across. Gross wages, employer FICA, FUTA and SUTA, 401(k) deferrals, benefit deductions, and accrued payroll each belong in a different account, every pay period. When that journal entry is late or wrong, your profit and loss is wrong with it. Usually nobody notices until year end, when W-2 totals and the general ledger disagree.

At Monily, the team that runs your payroll also keeps your books. Every pay run posts to the ledger, payroll tax liabilities clear when the deposits go out, and PTO accruals sit on the balance sheet as they're earned. There are no monthly journal entries to chase and no year-end surprises. Payroll-only software can't offer that, and neither can a payroll add-on unless you're also keeping your own books.

Every employer is either a monthly or a semi-weekly depositor. The IRS decides which using a lookback period, the twelve months from July 1 two years back through June 30 of last year.

• Monthly depositor: $50,000 or less in employment taxes during the lookback period. Deposits are due by the 15th of the following month, and new employers start here.
• Semi-weekly depositor: More than $50,000. Wages paid Wednesday through Friday are deposited by the following Wednesday, and wages paid Saturday through Tuesday by the following Friday.
• Next-day rule: Any day your accumulated liability reaches $100,000, the deposit is due the next business day, whatever your schedule.

Late deposits carry penalties of 2 to 15 percent of the unpaid amount. Withheld income tax and the employee share of FICA are also trust fund taxes, so the IRS can hold owners personally liable when they go unpaid. We confirm your schedule every year, make each deposit on time, and file the returns that go with them.

Paying an employee as a contractor is the most expensive payroll error a small business can make. Reclassification brings back unpaid employment taxes, penalties, and interest, and some states add back overtime and benefits. The IRS weighs behavioral control, financial control, and how the relationship works, while states such as California apply the stricter ABC test. We review classification before anyone is paid on a 1099-NEC.

Employees complete Section 1 of the I-9 by their first day, and you must verify their documents within three business days. States require new hire reporting within 20 days, and several ask for less. We collect the W-4 and I-9 and file the report.

Non-exempt employees earn one and a half times their regular rate for hours over 40 in a workweek, and states such as California add daily overtime. Exempt status depends on salary and duties, not job title. We set each employee up correctly and flag roles that look misclassified.

Hiring in a new state usually means registering for a withholding account and a state unemployment account before the first pay date. Reciprocity agreements change the rules for people who live in one state and work in another. An employee who lives in Pennsylvania and works in New Jersey, for example, is withheld for Pennsylvania only. We register the accounts and withhold for the right state.

A traditional 401(k) deferral lowers federal income tax withholding but not FICA, and a Roth deferral lowers neither. PTO accrual balances appear on every pay stub and post to your books as a liability.

Garnishment and child support orders come with federal limits and a set priority, and child support alone can take 50 to 65 percent of disposable earnings. We apply each order and remit it on time.

Premiums are based on payroll by class code, and carriers audit them every year. We produce payroll reports by class code so the audit matches what you actually paid.

If you're choosing a platform, we'll recommend one based on your headcount, states, and benefits.

Monily has run payroll and kept books for small businesses since 2006, for more than 5000 clients across 15-plus industries. We're an IRS CAA and QuickBooks Elite ProAdvisors, and our tax practitioners assist you and provide audit support if a payroll notice comes up. A letter about a late deposit reaches someone who already knows your account.

The team that runs your payroll also keeps your books, so every pay run posts to the ledger and nothing is carried across by hand. Plans scale from 1 to 10 employees up to 100 employees in several states.