As your business grows and you begin to hire employees to help in your business, payroll will become essential in your business. This is how you will reward and compensate your employees and by not doing this effectively you may lose your valued employees. Payroll can be complex and time consuming and there are multiple aspects to consider when it comes to payroll. You will need to be familiar with payroll calculations, tax codes, payroll regulations/laws, filing deadlines, overtime payments, state unemployment taxes, W-2 forms, garnishments and levies, taxable items, contractor/employee classifications and much more. There are many benefits to outsourcing your payroll instead of doing it yourself.
Saves Time
Payroll is very time consuming and requires attention to detail. The time will only increase as your team grows. It can be expensive to maintain the in-house payroll with the resources that are required. This also takes time away from your core tasks of maintaining your business. When you outsource your payroll, your time spend doing payroll type actions is drastically reduced.
Reduces Overhead Costs
Your time costs money and in-house payroll hours cost you money. The time it takes to calculate payroll each pay period, printing, signing, and distributing paychecks or pay stubs or processing direct deposit payments or electronic payments, generating reports for your bookkeeper or accountant and preparing and remitting payroll taxes and returns to government agencies is costing you money. The cost of outsourcing your payroll will be reduced compared to processing it yourself.
More Reliable
With an outsourced payroll service provider, you will not have to worry about employee absences such as vacations or holidays or employee turnover. If there is turnover with the payroll company, you will be able to rely on them for seamless services. If you have turnover within your business, you could possibly be without someone completing your payroll actions thus you will have to complete it and then you won’t have to worry about training the next employee how to complete payroll and the many functions that go along with it.
Professional Expertise
A payroll service provider only hires those individuals that know payroll inside and out. They are experts within the industry. Besides saving time and money, you will be able to rely on their expertise to keep your business compliant with all the payroll regulations and required taxes.
Data Security
When you are dealing with employee records and money, there is always a risk of identity theft, embezzlement or tampering with company records. When processing the payroll in-house, you need to consider the security risks associated with it and whether it is appropriately backed up in the event that it may fail. With an outsourced payroll provider, your data with be stored in a high-level server with data backup capabilities.
Government Compliance
About 40% of small to medium size businesses pay on average $845 each year in payroll penalties. These penalties can be from failing to deposit withholdings, depositing the wrong amount or for incorrectly filing documents. You are legally responsible for complying with all payroll regulations/laws and an outsource payroll provider understands these regulations/laws. They take the responsibility of complying with them very seriously. Most companies guarantee accuracy and compliance and if there ever was a problem, they would take full responsibility in fixing the problem.
Other Services
Most payroll service providers offer other benefits besides payroll, some can even replace your human resources department. Some provide contract generation, contractor services, labor law compliance, access to health benefits, and workers' compensation payments.
Being a business owner can be stressful. Payroll can add to that stress and it doesn’t need to. When you outsource your payroll, you will save time and money, have reliable and expert professionals on your team, while not having to worry about your information security and complying with all the payroll regulations and laws. Outsourcing your payroll only makes sense for your business.