Payroll is a record that restaurant owners keep to record all employee salaries, hourly wages, and deductions for a given pay period. The choices that a restaurant owner has to make are involved, when it comes to payroll. Questions like when employees will be paid and on what schedule, if overtime will be made available, and how it will be paid out, how employees will keep track of their time, and which employees will be salaried and which will be hourly are important. But also, there are other factors to consider such as the sort of paid off time you will, if you decide to provide.

In addition to that, there are certain liabilities that you will need to be accountable for. Making sure that with holdings, medicare and social security are taken care of, as well as accounting for federal and state unemployment tax payable, and state worker’s compensation tax payable. The payroll tax reports that a restaurant owner has to file are a quarterly report, or a Form 941, Federal Unemployment Tax Report, or Form 940,  State Worker’s Compensation and there may be forms for your local taxing authority on a local level, as well.

In addition, a restaurant owner may have to decide the fiscal set up- for instance, asking the question of “Are my staff to be hourly or salaried?” Hourly employees have to receive time and a half for overtime work and are paid hourly, where as salaried employees receive a yearly wage- divided over pay terms, usually monthly and do not receive overtime. Couple this with the choice as to how often employees will be paid- the consideration here is that in order to prepare payroll, it costs money, so, employers generally try to keep paydays to a minimum. Thinking about over time, the consideration is usually if it will ever be available, and if not, how to maintain adequate coverage at all times. Overtime is paid at time and a half and can be very hard on the budget, so most avoid allowing staff to work it.

Common set ups are twice a month, or every other week. Another consideration is full time verses part time employees. There are reasons apart from availability that this is something that has to be thought about- full time employees generally receive benefits, whereas part time do not. An employee is usually considered full time working thirty hours or more during a work week.

These are a few of the considerations with payroll that most restaurant owners and managers face when dealing with payroll. It is often a great deal of paperwork and effort, and can be something that is at some point, passed off to the restaurant owner’s accountant on a tax level. More often than not, the paperwork is dealt with by someone on a managerial level, and the owners do not handle it- however, when it comes to taxes and general payroll set up, this is one area where owners are typically more hands on.