Posted By Paula Sanchez, HCM Services Advisor September 20, 2023
If you're a cannabis business owner, it's important to take the time to set up a payroll system that will help you pay your employees correctly and on time, and that will keep you compliant with all applicable laws.
Here is everything cannabis businesses and dispensaries need to know about setting up cannabis payroll.
How to Set Up Payroll for Cannabis Businesses
Payroll is one of the most important aspects of running a business, but it can be especially complex for cannabis businesses.
This is because of all the challenges of the cannabis industry, the fact that the industry is heavily regulated and has a number of specific laws and regulations that businesses need to follow when it comes to payroll is what makes it uniquely challenging.
This is why businesses need a cannabis payroll company to partner with, and why not just any modern payroll company will cut it.
Cannabis businesses and dispensaries who are looking to start setting up cannabis payroll should take the following steps to set up a payroll system for your cannabis business:
Find a Cannabis Payroll Company
There are too many payroll providers that are out there to count, but the most important thing to remember is most are not created equal.
Many have little to no real experience in the cannabis industry, even if they say they do or have a few cannabis businesses that they already work with. The truth is, the complexity of the cannabis industry is something only a seasoned cannabis payroll company can navigate.
When choosing a payroll provider, it's important to find one that has experience working with cannabis businesses and that can help you stay compliant with all applicable laws.
Some factors to consider when choosing a cannabis payroll provider include:
- Experience working with cannabis businesses
- Knowledge of cannabis payroll regulations
- Ability to generate compliant paychecks
- Security features
- Customer support
Collect Cannabis Employee Information
Once you have found a cannabis payroll company such as PayNW, you'll need to collect certain information from each of your employees, such as:
- Their name
- Social Security Number
- Bank Account Information.
This information will be used to calculate wages, withhold taxes, and generate paychecks. A crucial and admittedly more complicated step for the cannabis industry.
Installing Cannabis Payroll Software
Once you have your cannabis payroll service and software chosen and have collected employee information, you can begin implementing your cannabis payroll system.
While cannabis payroll is surely the most commonly used workforce management tool, businesses should consider a variety of cannabis workforce management solutions to most effectively manage their workforce.
Cannabis payroll helps businesses to:
- Calculate Wages and Taxes
- Generate Compliant Paychecks
- Track Employee Hours
- Integrate with Other Business Systems
- Improve Data and Payroll Security
Process Cannabis Payroll (Finally)
Once your cannabis payroll software is set up, you can start running payroll.
This process will vary depending on the software you're using, but it typically involves entering employee hours and wages and then generating paychecks.
Pay Cannabis Employees What They've Earned!
Once you've generated paychecks, you'll need to pay your employees. This can be done by direct deposit, check, or cash.
That may seem simple, but when it comes to the unique banking and direct deposit challenges of the cannabis industry this can get complicated too.
This is just another reason why it is crucial to partner with a cannabis payroll company that knows what these challenges include, and who already has the systems and processes in place to work around or through them.
Get Started with Cannabis Payroll
If you are ready to take on the above task list, then look no further. You have already found the cannabis payroll provider that you have been looking for!
Contact us today to get started, or take a closer look at some of the features of our cannabis workforce management software.