Outsourcing your payroll saves you time and the money involved in the payroll process itself, but can it do even more for you? The answer is yes – it can also reduce your liability for issues related to being an employer. Payroll services reduce your risks in several ways.
No Worries About Overtime Issues
When you upload records to online payroll services, you don’t have to worry about overlooking someone’s booked overtime hours. This saves you from complaints and possible legal issues that come from such oversights. Everyone will be paid the proper overtime rate for the time they’re entitled to.
Jobs Will be Properly Classified
Employees vs. Independent Contractors
Payroll services don’t just cut checks. Most also offer full HR services, including keeping track of everyone’s employment-related records such as what jobs they do and all of their perk-related benefits. The companies will use these records to ensure that everyone is working under the right job classification, such as whether they’re independent contractors or full employees.
Penalties for misclassifying someone as an independent contractor are high, but in some cases, it’s hard to determine whether or not the classification applies. Payroll companies have staff who are experts at making the proper distinction, and it’s worth it to let them do so if there are any doubts.
Visa Employees
Properly recording the status of any employees who are staying in the U.S. on a visa is also important. Not only can mistakes lead to fines, they can also cause the employee to have to leave the country. The right payroll providers can make sure all of these workers are properly documented, saving you from the liability of errors in this area.
Prevention of Insurance-Related Problems
Every state requires worker’s compensation insurance for at least some employees, but there are many variations on the regulations. Some require it for every employee, while others only require it for companies more than a small number of them. A small business payroll company will be sure to know when you have to start providing this coverage, and if you get their HR services, make sure that it is indeed provided.
Health and other insurance can also be handled by payroll providers. These types of coverage are common benefits, but they can be hard to keep track of on your own. Different employees may have different plan selections, amounts withheld from their paychecks, and have other variables to account for. When you outsource your payroll, you no longer have to go through records to determine everyone’s details before you cut checks. The best payroll service providers will use the records that you upload to take care of everything.
Top Ten Best Picks for Payroll Services
Avoid Taxation Problems
Taxes are some of the most nettlesome payroll issues, but they are also some of the most common. That’s because you have to be involved in the taxation of all full employees. Federally, you have to pay various payroll taxes on each worker, and for most, you have to withhold a percentage of pay for their portion of income and other federal taxes, too. Depending on where your business is located, you also might have to pay state, county, and city tax, all according to different formulas.
Mistakes made with these taxes can lead to fines and other punitive actions. In some cases, failure to withhold or pay them can result in jail time. Fortunately, there is an easy way to avoid administrative errors in these areas, and that is to outsource your payroll. Payroll providers take many steps to ensure that there is no discrepancy between what is paid, what is withheld, and the records that you upload to them.
Why Not Just Use Your Own Software?
Even the best payroll software takes time to use, and can be stymied by errors in data entry. This is especially true if you have to transcribe your data from your employee records into the software platform. Then, there is an extra opportunity for typos to arise.
Software that can work directly with your records, eliminating the need for transcription, does exist. The problem is that its cost is enterprise-level. Small businesses typically can’t make this sort of investment; they have many other, more critical, things that need their financial attention. This makes it so that small and even medium-sized companies need a way to bridge the gap between the need to have perfect payroll handling and the cost of the software.
Outsourcing provides this bridge. Payroll services for small businesses have many customers, so they can afford to invest in the best payroll software. The costs of the platform, and the people who use it, are then divided amongst all of the payroll provider’s clients. This makes it so that no one company has to shoulder the burden of the enterprise-level software that greatly reduces errors.
Finding the Right Payroll Provider
There are several options to consider within this category of service provider. Some payroll providers focus on being able to serve every possible company, and boast clients ranging from 10-person shops all the way to quite large Fortune 500 companies. Others are more specialized, and focus on the intricacies of one or a few specific industries. Still others have tailored themselves to be expert payroll services for small business, and will even take on clients with fewer than 10 workers.
Because of this, the first step to finding the right provider is to choose from those who are the most suited to your industry and company size. You should also consider the all-arounders, because these are typically large payroll firms with enough accountants and lawyers to know the tax and legal ins-and-outs of pretty much any business.
Next, make sure the ones you’re considering have good reviews. Now that it’s easy to find reviews online, it’s also easy to find companies that have excellent ones.
Finally, schedule a consultation with the company. This will let you discuss your needs and make sure that the establishment can meet them. It will also give the company a chance to explain exactly what it needs from you in order to do your payroll. This is important even with business online payroll companies. You’ll need to know which data formats you use, what turnaround times to expect, and more. By having a consultation in advance, you eliminate the risk of bad surprises on either end.
To learn more about our payroll services, just contact us. We’ll be happy to explain everything.
