Payroll services can save businesses the time and energy it takes to pay employees, pay taxes, and file tax reports.
Businesses hiring payroll services should vet the company and communicate their needs effectively.
In this article, we show you how businesses can stay organized and afloat by hiring a payroll service. You can use the information to understand what payroll services can do for your company.
Consider What the Payroll Service Includes
Payroll services usually provide a variety of services depending on your needs. Three essential elements of payroll processing should always be included:
- Paying your employees
- Paying your taxes
- Filing tax forms
Payroll services help you process employee payments and taxes on time while providing you with 24/7 access to detailed reports.
For example, ADP provides business owners with instant access to user-friendly reports that display information about total hours, total earnings, and employee updates.
Some payroll services provide self-service functions that allow employees to set up and manage their personal information, control their deductions, and access their pay stubs and tax forms.
Many payroll services provide features that can simplify your onboarding process and your accounting needs, such as:
- Integration with your employee time-tracking system
- Integration with your accounting software
Human resource services are commonly packaged with payroll services, which can pose a significant advantage to some companies.
A recent study of over 500 small businesses discovered that nearly one-third of them don’t have any formal HR support, making integrated payroll and HR software an attractive benefit to many business owners.
The functions provided by payroll services can help businesses run more smoothly while relieving them of time-sensitive demands such as writing paychecks and filing taxes.
Compare Payroll Services Costs
Most payroll services charge a monthly fee, a per-transaction fee, or a combination of both.
For example, a typical payroll service might charge $0.80-$2.00 per check plus a standard monthly fee, while tax filings and direct deposit can cost about $4 – $9 per pay period.
Additional fees, which vary by provider, can apply to situations such as:
- Setting up your account
- Adding or removing employees
- Changing employees’ personal information.
Make sure you are aware of how much the payroll service will cost before investing in one.
Are Payroll Services Worth the Expense?
According to a report by Paychex, more than 10% of small business owners spend over 11 hours a month on payroll taxes, which means a payroll service can likely save you more than it costs.
Payroll services can do more than save you time, though. They can also provide you with a way to file and pay your taxes accurately and efficiently.
Each year, about one-third of employers make payroll errors and 40% of small businesses incur an average $845 in IRS penalties.
Many payroll services provide accuracy guarantees that take the liability off your shoulders if there’s an error in your tax reporting.
The amount of hours you save on payroll processing, plus the added benefit of tax reporting accuracy, makes payroll services well-worth the investment for many businesses.
Evaluate the Best Payroll Service for Your Business
Before you begin comparing payroll services, evaluate your business needs and consider which features are most important to you.
When evaluating your business needs, think about the number of people your business employs and whether you have unique accounting needs.
For example, companies that employ union members or restaurant workers who receive tips should hire a service with experience in that niche.
Additionally, it helps to outline the features you’re looking for, such as:
- Free account migration and integration support
- Customer support hours
- Accuracy guarantee
- Time-sensitive turnarounds
Once you’ve found a payroll service that looks like a good match for your company, investigate their reputation.
Some ways you can check the quality of a payroll service include:
- Looking for the top-rated payroll services
- Reading the company’s online reviews
- Asking if their representatives are APA-certified
Finding the right payroll services provider for your company can help keep your business organized and afloat while allowing your team to focus on other areas of the business.
Finding the Right Payroll Service Can Help Your Company Run Smoothly
Payroll services can help your business process payroll, make payments, and file essential tax information. Costs can vary from one service to another but are often an excellent investment for small businesses.
Consider investing in payroll services to save your company time and money. Your business will be better prepared to deal with finances and won’t have to waste resources creating tax reports.