Employee payroll is a sensitive issue in any field no matter what type of business you have. You want your employees to trust that you will pay them what they earn, in a timely manner, with minimal to no mistakes. The complex laws governing employees’ wages (and tips for restaurants) paired with the already difficult process of running a successful business can make doing payroll a difficult and time consuming task. For improved accuracy and time-saving services, many business owners utilize a payroll outsourcing service.
Why Should My Business Do This?
A payroll outsourcing service can take responsibility of many financial and legal matters regarding your business’s payroll. They provide business owners with the peace of mind of knowing that their employees’ payroll and tax payments are taken care of. In fact, a payroll company can do the following tasks and more:
1. Calculate payroll checks
2. Print and deliver checks
3. Handle direct deposits
4. Calculate and pay tax payment(s) for each employee and ensure compliance
5. Print and file W-2 forms and other payroll tax returns
6. Provide specialized reporting for restaurants such as tip allocation tracking and FICA tip credit reporting
7. Provide employee background screening
8. Stay up to date on the latest payroll and tax regulations
What Does It Cost?
Pricing will vary from one payroll service to another. Pricing is based on several factors such as pay frequency, number of employees, services selected, etc. Some service providers charge a base fee for all services, as well as fees for each check issued, usually anywhere from $.80 to $2.00 per check. For additional services, such as direct deposit and tax filing, there are usually additional fees. Some payroll services bundle the most commonly used services for one, low price. In order to avoid paying excessive fees, consider the services you are most interested in for your business, and always inquire about any add-on fees.
Won’t I Save Money By Doing It Myself?
This may be one of the biggest mistakes business owners make. While it may appear to be easy to do, the rules are complex and the penalties are very severe. One mistake can cost you several years of what you would pay someone else to do this for you. Also, your time is valuable and can be much better used to produce additional revenues.
How Do I Choose The Right Payroll Provider?
It is extremely important to pay your people accurately, efficiently and in a timely matter. Therefore, it’s in your best interest to avoid taking any risks when selecting a payroll provider. Be sure you are choosing a reliable, reputable company who will not charge you hidden fees or be unresponsive when faced with errors or payroll issues. Follow these guidelines when choosing a payroll company for your business operation:
- Ask Your CPA – your CPA has hundreds of clients who use payroll companies and have years of experience with most of the major players in your market. This is by far the best way to get this done right.
- Search the web.
- Ask other business owners.
If you come up with more than one alternative, you will want to interview the candidates, much like hiring a new employee. Ask questions of the companies you are considering. Familiarize yourself with what services they offer and how those compare to your business needs. Ask about how they transmit their data information (i.e. over the phone, PC or Internet) and their customer service model. Do not be afraid to ask for references. Consulting with current clients can result in useful information about the payroll service provider’s reputation, efficiency and accuracy.
Forging good working relationships with your payroll service providers is critical. Will you have a dedicated account representative? What are their hours of operation? Inquire about who will consistently handle your business needs should any issues arise. You may also want to ask about the employees’ experience levels.
Adapted from an article written by Leigh Wilson on 2/28/13 for Culintro