Payroll

If you decide to handle payroll on your own it's a good idea to visit with the city or county's human resources person before starting the process. Ask him or her about setting up payroll, challenging areas, pitfalls to be avoided, and any other advice they can give. If that's not possible then try visiting with a local accountant who handles payroll. This initial meeting can really help with setting up payroll for your employees. Payroll is another area where it is good to have two people who know how to process payroll. This helps with checks and balances and also gives the district a backup person if the main payroll person is on vacation. In general the following things need to be completed:

Enter employee information into your software. This information includes employee's name, contact information, hourly or annual wage, sick and vacation leave earned, and the cost of health insurance and/or retirement if applicable.

Set up the connection between your bank and your payroll system. Don't forget to enter any pertinent information for automatic deposits for employees.

Set up pay stubs and reports so that this is ready to go when you need to pay your staff.

Complete paperwork for the Internal Revenue Service to pay federal income tax, Medicare, and Social Security. It's good to have these payments withdrawn automatically. Review "Publication 963: Federal-State Reference Guide" and "Publication 15: (Circular E) An Employer's Tax Guide" for more information about how this works.

Contact the State Social Security Administrator for assistance in determining which employees need to have Social Security and Medicare taxes withheld. You may hear the phrase "Section 218 Agreement." This is an agreement that states, local governments, and the federal government entered into many years ago. It's a complicated process so you really need to visit with the state administrator. 

Complete paperwork for the State of Montana's Department of Revenue to have state income tax withdrawn from employee paychecks. Like the IRS the library district will need to set up payment to the State of Montana. Visit the State of Montana Department of Revenue's wage witholding website for more information.

If you have not already done so complete any Department of Labor and Industry paperwork to make payments for worker's compensation and unemployment insurance.

Complete paperwork for PERS to make payments for retirement benefits if applicable.

Complete paperwork for insurance withdrawals if applicable.

From your personnel policy identify when staff will be paid and then set up a schedule for completing the tasks necessary for payroll. This includes things like timesheet submittal deadlines, entering that information into the system, making sure that all necessary deductions are made, and anything else your accountant advises.

Consider a "test" run where you go through the process. This helps you identify things you need to do and/or fix.

Set up a checks and balances system for payroll. If at all possible have one employee enter all of the data while another employee double-checks the data.