Buyer Guide to Payroll
Processing payroll can be a time consuming and complicated task. As an employer, you’re required by law to withhold employee wages for federal and state taxes. Tax amounts aren’t fixed- in fact, they can change from month to month based on employee elections, changes in legislation, and amendments to federal and state tax codes. If you provide retirement or other savings accounts for your employees, you’ll need to adjust wage amounts to reflect these contributions. Employee vacation pay, bonuses, and commissions can also take time to calculate, especially if you process payroll several times a month. Missing a filing deadline or incorrectly computing tax amounts can lead to expensive penalties and fines.
Payroll services offer a solution for businesses struggling with payroll calculations. Payroll companies specialize in calculating employee tax amounts, allocating funds to employee savings accounts, and job and project cost reporting. A payroll company can calculate withholding amounts, write checks (or offer direct deposit), and provide W-2 forms at the end of the year. Most companies also offer features like online account access so employees can check on how many sick and vacation days they’ve used and access pay stubs quickly and easily.
A payroll outsourcing company can also provide useful information to business owners. Most companies can calculate labor costs by job, by project, or by client. If you use performance incentives like bonuses or commissions, you can track how these costs factor in your business profits. Making strategic management decisions is easier when you have more information. Payroll reporting functions allow you to see how labor costs affect your bottom line, and help you plan for future projects.
Whether you have two employees or two hundred, accurate payroll calculations and labor cost information are essential. This guide outlines how payroll processing companies outsourcing can save your business the expense associated with missed deadlines or incorrect paperwork, help you make strategic decisions, and offer incentives to your employees like direct deposit and electronic account management. Before you decide to outsource, it’s important to know the facts.