Who needs to run payroll?
Owner Operated S-Corporations need to run payroll by IRS guidelines. In an S-Corporation your status as “employee/officer” and “shareholder” are distinct and your working within the company must be tied to payroll. If your LLC has elected to take S-Corporation tax structure (which is very common), you must also run payroll for compliance. If you have other structures, including sole proprietorships, partnerships/LLCs, and C-Corporations, you need to run payroll when you have outside employees, whether full-time or part-time. While you can do the paperwork by hand, the penalties and fines for screwing up are unreasonably large, so it’s important to use an affordable payroll service.