Should You Outsource Your Payroll?
Many companies choose to handle their own payroll. Typically, these companies are either wanting to protect their salary information, maintain control over their data in the event of last minute changes, or be more cost-effective. If you work in a small business that has a stable, salaried staff, handling payroll internally may work well for you. However, in almost all other circumstances, outsourcing payroll can save your company time, training, and potentially costly mistakes made with tax obligations.
When you outsource your payroll, you will typically receive the following:
- A payroll company will calculate the pay and taxes for each employee and print and deliver or directly deposit checks. They will also assist with deductions for employee benefits and/or 401k plans.
- They will file state and federal payroll taxes for your business, usually at little to no additional cost. Many companies will also handle tax payments that must be made through the
- Electronic Federal Tax Payment System (EFTPS).
- They will keep management up to date with payroll reports to ensure your labor costs and employee’s checks are accurate.
- In terms of cost, you will find payroll pricing can fluctuate based on the economy. Typically, you will pay a manageable base fee for payroll and tax services. Further services can be added for an additional cost.
When searching for payroll companies, you will want to look for stable providers with at least a few hundred clients. Because pricing can be so variable, you should investigate several different companies. Be sure to inquire what their basic service includes, what their tax filing services are, and their hours of operation for customer service to see if they are a good match for your business needs.