• Food trucks have been growing in popularity over the past 10 years, and as their numbers grow, so do their needs for business services, like payroll.
• Finding the right payroll solution for your food truck can save you time, money, and headaches, not to mention keep you in line with tax laws and labor law compliance.
• Find out more about the best payroll software for food truck owners in this article from Nav’s experts. 

The Current State of the Food Truck Business

According to IBISWorld, there are over 30,000 food trucks in the U.S. — a number which has increased nearly 10% year over year in the past decade. Food trucks provide a casual, fun food choice for consumers, but even as the trend has continued to grow, food truck employment has faced some challenges. The 2020 pandemic cut employment in food trucks by over half, dropping from a high of over 30,000 food truck employees in the U.S. in 2018 to just over 14,000 in 2020. As of 2022, the number bumped up slightly to just over 16,000 food truck workers across the country. 

The restaurant industry and food service industry in general have had a difficult time keeping employees, and many small businesses have tried to find ways to make food service employees happier, like higher wages and benefits. At the same time, food prices have increased due to inflation and restaurants, food trucks, and bars have all felt the crunch of trying to provide quality food and service while keeping an eye on their bottom line. 

One way food truck owners have needed to adapt is to streamline their payroll processes and cut costs wherever they can. Payroll software can automate many aspects of employee payroll for food truck owners, saving time, money, and costly mistakes. 

Benefits of Using Payroll Software

There are many benefits of using payroll software for food truck owners, including: 

• Making fewer mistakes, especially when it comes to data entry and wage calculations
• Saving time and energy by letting the software do most of the work
• Increasing data security, especially with employees’ personal information
• Reducing costs by lowering the number of employees needed to handle payroll
• Creating greater visibility with reports that help you include your payroll costs in your budgets
• Integrating with accounting software and bookkeeping software to help you keep track of labor costs
• Increasing compliance with labor laws and payroll tax laws, including automated tax filing and employee deductions

Common Features of Payroll Software

The best payroll software for food truck owners will generally include several common payroll features, such as:

• Time tracking and schedule request management, or integration with time tracking services
• Expense and compensation management, including tax withholding, wage garnishment, overtime calculations, and PTO management
• Employee self-service for tax forms and personal information
• Direct deposit or check printing processes
• Customizable reporting 
• Automated tax filing and tax forms management
• Integrations with other business software, including HR tools and accounting software

You may want specific features for your business or functionality to help with other business needs, such as inventory management or payment processing. 

How Payroll Processing Works for Food Truck Owners

Food truck owners have specific needs when it comes to payroll processing. Many food truck owners work for themselves but pay workers as needed. As you grow your business, and possibly set up franchises, you’ll have to start hiring and paying more employees, which gets complicated.

The first step to paying your employees is making sure your business is registered with the IRS, which will collect payroll taxes from you. To do this, you’ll need to apply for an employer identification number (EIN), which is like a Social Security number for your business. After you’ve done that, you can choose your payroll solution (check out our suggestions below). 

You’ll need to establish a withholding account with your state’s official reporting department — usually the department of labor or revenue — where you’ll be paying your monthly payroll withholding payments on behalf of your employees. You may also need to file new hire paperwork with your specific state. 

Worker’s compensation insurance is an important part of having employees and is required in most states to operate. This insurance will help cover your employees’ medical costs if they’re ever injured on the job, as well as wages and some disability benefits. 

You’ll need to establish policies on time tracking and scheduling so that you can ensure your employees know what’s expected of them. Many payroll solutions allow you to include employee handbooks and manuals that employees can refer to, and e-signature capabilities to show that they have read them. 

The best payroll solution for your business will be able to manage legal and tax compliance issues for you, including reporting and filing. That way, you don’t have to worry about missing a deadline or operating your food truck illegally by accident. 

How to Choose the Best Payroll Solution

To choose the best payroll solution for your food truck, you should ask yourself a few questions. 

How much time or resources will you commit to payroll? 

If you’re running the food truck on your own and only have a few employees, you may not  want to be in charge of the administrative work that it takes to run payroll. This work includes researching federal, state, and local laws around payroll and taxes so that you stay compliant. You may want to find a payroll system that can automate as much as possible, which many payroll software providers offer. You’ll also want to make sure it’s an easy to use, intuitive system that doesn’t take much time or effort to set up. At the same time, you may want to consider a full-service payroll company that can handle all aspects of payroll, from timesheets to taxes. 

What other software will your payroll system need to integrate with? 

If you already have a time tracking system with your point of sale (POS) system or you’re already using specific accounting software, make sure that your payroll system can integrate with them easily. For instance, you might want your payroll system to integrate with your inventory management system to help you with forecasting and budgeting based on your wage costs, food costs, and revenue trends. You may also have another payroll system, such as ADP, that handles your paychecks or tax payments and simply need payroll software that can handle time tracking or employee tax forms. 

How accessible does it need to be?

For most restaurant owners and food truck owners, their employees can clock in and out at their POS system. But you may want a cloud-based system and a mobile app on both iOS and Android for your employees so they can manage their time off requests, scheduling, communications, and tax forms on their own. A cloud-based service will allow you to run payroll from anywhere, regardless of where your food truck is parked, and give you the ability to see real-time updates on employee schedules and payroll costs. 

What other services do you need your payroll system to handle? 

Beyond its primary purpose — to pay employees — a payroll system can help with other HR issues, such as employee management, onboarding, communications, scheduling, and more. If you need your payroll system to manage tax filing and forms management, that’s another big consideration. 

Best Payroll Software for Food Truck Owners

The best payroll software for food truck owners will depend on your business’s needs, but there are some that are likely to be a good choice for your business. Here are some of our top picks of payroll systems for food trucks. 

Square Payroll

If you already use Square as your POS system, Square Payroll may be a good option for your food truck. It offers full-service payroll, automated tax filings, and employee benefits, and it allows your employees to clock in and out at your POS terminal. 

QuickBooks Payroll

One of the benefits of QuickBooks Payroll is that it integrates with Intuit’s accounting software, QuickBooks Online, so you can easily integrate payroll into your bookkeeping and accounting. Many business owners use QuickBooks for their accounting and payroll needs, so there are plenty of forums for help. 

Gusto

Gusto is a popular option for payroll services, offering a full-service payroll solution, time and attendance tracking, and robust reporting. It’s known for its ease of use and for having a simple monthly fee. 

Toast Payroll

Offered as an add-on to its point of sale solution, Toast Payroll & Employee Management is a human resources management solution that can be especially useful if you already use Toast for your POS. Beyond handling payroll, tax compliance, employee management, and more, the system also allows you to handle tip distribution as part of your payroll. However, the system isn’t known for being user-friendly, and its pricing system can be confusing. 

If you’re looking for financing to start or grow your food truck business, Nav can help. We use your business data and information from over 200 partners to find financing you’re most likely to qualify for, such as small business loans. Use Nav to see your options today. 

• Can you use Excel for payroll?

  Yes, you can use Excel for payroll. Many small and medium sized businesses do because it’s easy and relatively inexpensive. However, you may encounter some issues, such as data entry errors, difficulty consolidating information from month to month, and the inability to share reports with your employees. You’ll have to manually create certain forms and documents, and you won’t be able to automate processes.

• Is there a free payroll software?

  There are free payroll software options available for food truck owners. However, they may not include all of the features you need, such as tax filing services, direct deposit services, or customer service. They may also include advertising, which can be annoying. 

• What is the difference between a payroll software and a POS system?

  Payroll software helps you run payroll based on employee time and wage calculations. A point of sale (POS) system is where you ring up customers so they can pay for goods or services. This can include an online checkout or in-person cash register. A POS system may also track inventory or other operational items, and it may integrate with your payroll system to help you understand how employee schedules and sales interact.