Yes, you can do your payroll for one employee, especially if you have a simple payroll structure and are willing to invest time in learning the basics of payroll processing. However, remember that payroll involves various legal and financial responsibilities, so ensuring accuracy and compliance with relevant laws and regulations is essential.

Steps you can follow to do your payroll for one employee:

1. Obtain an Employer Identification Number (EIN): If you don’t already have one, you’ll need an EIN, a unique identifier issued by the IRS for your business.
2. Gather Employee Information: Collect all relevant information from your employee, including their full name, address, Social Security Number (SSN), tax withholding preferences, and other necessary details.
3. Choose a Payroll Schedule: Decide on a payroll schedule, such as weekly, bi-weekly, or monthly, and inform your employee of the pay period.
4. Calculate Wages: Determine your employee’s gross wages for the pay period. This may involve calculating regular hours, overtime (if applicable), and other additional earnings or deductions.
5. Withhold Taxes: Use the information provided by your employee to calculate the appropriate federal, state, and local taxes to withhold from their paycheck. You can use IRS withholding tables and state tax authorities’ guidelines to help with this.
6. Payroll Taxes and Filings: Set aside the withheld taxes and pay them to the appropriate tax authorities on time. Additionally, you’ll need to file payroll tax reports, such as Form 941 (Quarterly Federal Tax Return), with the IRS and any state and local tax filings required.
7. Prepare Pay Stubs: Generate pay stubs for your employee detailing their gross wages, deductions, net pay, and year-to-date totals.
8. Keep Records: Maintain accurate payroll records, including employee information, pay stubs, tax filings, and other documents.

While handling payroll for one employee is feasible, it’s essential to be aware of your location’s payroll laws and regulations, as non-compliance can lead to penalties and legal issues.

If you find payroll tasks overwhelming or complex, consider using payroll software or outsourcing payroll services to ensure accuracy and compliance with payroll laws. This way, you can focus on other aspects of your business with peace of mind.