Whether or not you're new to the food truck industry specifically, being new to any business is especially difficult - especially when you find yourself in the driver's seat as the owner. There are a lot of questions that will arise, such as: Who will I hire? How will I determine a good salary for each employee? Who will conduct new hire trainings? These questions may seem difficult to answer at first, but once these decisions are made another more pressing topic arises that pertains specifically to you, the food truck business owner: How do I set up a payroll system?
The issue of setting up a payroll system for your mobile food stand's employees can be daunting if you've never run your own business before. However, the required steps aren't nearly as difficult as the process sounds at first, especially when each step is taken one at a time. Here is a list of the items you will need to address before a new employee opens the mobile food stand's service window for the first time:
- Get an Employee Identification Number (EIN). You can get an EIN from the IRS. This number may also be referred to as an Employee Tax ID or as Form SS-4. An EIN is a 9-digit number that is necessary for reporting taxes and such to the IRS.
- Get the correct paperwork for your employees. Each of your new employees must fill out a Federal Income Tax Withholding Form W-4 so that your food trailer business can withhold the correct federal income tax from his or her pay.
- Select a pay period. Generally, businesses set a monthly or bi-monthly pay period - but this may at times be determined by state law with most favoring bi-monthly payments. During each period, your mobile food business must withhold income tax for this time period.
- Document employee compensation terms. How will you track employee hours, compensate for overtime, or handle paid time off? Did you lie these terms out as clearly as possible for your employees? Have you considered other deductibles, such as health plan premiums and retirement contributions?
- Pick a payroll system. Payroll system options may include in-house or outsourced choices. As the employer, you are responsible for reporting and paying all payroll taxes, so ensure that whatever option you choose is utilized correctly.
- Keep your records for the correct amount of time. Federal and state laws require that employees keep records for specified periods of time. So, your food truck business must follow these regulations carefully, even if it means that you must hold onto documents for several years after the employee's termination.
The good news is that once your payroll system is in place and you've clearly defined your compensation terms to employees it'll be smooth sailing (or driving) from that point on out.