Doing payroll yourself is like any DIY project: a great way to save money if you have the time and skills to do it right. It’s a popular choice for new businesses, but the time requirements and — surprise! — costly mistakes can quickly become overwhelming.
Be prepared to track and record employee hours, calculate wages and deductions, distribute paychecks, deposit withholdings, manage compliance with all regulations, and file and pay employment taxes.
Payroll software helps automate some aspects of the process, such as calculating wages and deductions. Plus, if you have questions, most payroll software comes with some level of support. But you will still need to track and record all employee hours, enter the data, file and pay the right taxes at the right time, and deduct the proper withholdings from every check. Ultimately, compliance will be your responsibility.
Businesses that place a high value on their time and peace of mind often end up partnering with a full-service payroll provider. A full-service provider will either assume or assist with all aspects of the process: deposits and withdrawals, withholding and garnishments, and filing taxes. Some may state that your taxes will be done right or will pay to correct errors. The most common surprise here is that you end up saving money because you are no longer racking up expensive penalties.
When you enlist the help of an accountant, you get a trusted advisor who probably knows your local, state, and federal tax requirements. You’ll save time, but different accounting professionals handle payroll management differently—many simply enlist the help of a full-service payroll provider on your behalf—so ask yours what level of involvement they’ll expect from you.
A PEO is a co-employment partnership that can benefit both your company and your employees. It’s similar to a full-service payroll and HR outsourcing provider, but with some added benefits: built-in compliance monitoring, access to premium employee benefit plans at a competitive rate, workplace risk and safety support and guidance in day-to-day HR topics. A PEO provides you with the simplicity of having a single vendor to support you across your human capital needs.
Provides a paper trail and doesn’t require employees to have a bank account.
They must be hand-delivered or mailed.
Funds are transferred instantly, minimizing wait times for employees.
Employees must have a bank account.
Workers get immediate access to their funds without needing traditional bank accounts.
Cards are easily lost or stolen, and workers who need cash will be subject to ATM fees.
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