Processing payroll is more than just collecting employees’ hours, calculating wages and issuing paychecks. Outsourcing payroll could be beneficial to your business.
Why? Your payroll administrator must adhere to federal and state requirements, and understand how to factor in health care deductions, Social Security, employee tax withholding, and employee benefits.
Having an experienced payroll provider behind your internal team can be a significant asset to the productivity and success of your business. Consider these four benefits to outsourcing payroll:
1. Connect with experts
Changes to payroll are frequent and can be complicated.
With the help of an experienced outsourced payroll provider, you can quickly understand, adapt and implement changes to reporting requirements, wage and hour laws, and taxes.
2. Reduce risk and avoid penalties
According to the IRS, 40% of small businesses pay an average penalty of $845 per year for late or incorrect filings and payments.
As an employer you’re required to pay federal and state income taxes, Social Security and Medicare taxes, and federal and state unemployment taxes. You must also file payroll returns on a monthly, quarterly, and annual basis.
You may be familiar with annual W-2 reporting, but additional reporting is required throughout the year for state withholding, unemployment wages, and 941 returns.
If you fail to meet these requirements, the penalties can be complicated and steep.
A payroll provider can help ensure you’re meeting every filing requirement.
3. Gain access to technology
Can you offer direct deposit to employees? Can your employees access their pay history, Forms W-2, and tax documents online?
Using a third-party payroll provider can allow you access to robust technology and online tools.
4. Free up key staff
In today’s business environment, one person can wear many hats. Working with an outsourced payroll company can help streamline processes and boost productivity – freeing up key staff to focus on other responsibilities.
Have questions about payroll? Let’s talk!