Take the Headache Out of Payroll Processing
When you have employees, the one thing you cannot afford to “mess up” is their paycheck. While you can absolutely do your payroll yourself — and hopefully your employees love their job — nothing will reduce their employee satisfaction faster than a late or incorrect paycheck. While on the surface cutting a payroll check may sound like a simple task, in reality payroll involves much more than simply doing the math to calculate the number of hours worked times an employee’s hourly wage.
Fortunately, because payroll management is so often outsourced, the market for this type of service is highly competitive. When you bundle your services with a Professional Employer Organization (PEO), you will not only ensure less work on your part but fewer headaches. After all, you don’t want to be one of the estimated 40% percent of small businesses that will incur the cost of a payroll penalty each year.
A PEO will help you keep your company on top of the latest state and local taxes, FICA and the withholding information your employee provided on their W-4. Missing an update to the tax codes or tax rates could mean that the incorrect amount of taxes are filed, resulting in you and/or your employees owing additional tax at the end of a quarter or a year. Or, even worse, having to deal with an audit or possible tax penalties. As you investigate the market for a payroll provider, make sure they have the following:
- Guaranteed tax payment filings – and the ability to make it right if you get a notice from a tax agency
- A U.S. based support team ready to assist AND available to reach when you want to connect with them and in the communication style you prefer (email, phone, online chat, fax, etc.)
- Options available if a paycheck needs to be expedited the same day, the next day or in any unscheduled manner such as for a final paycheck.
The last option that is also very important to consider when it comes to payroll is direct deposit. The time you (or an outsourced company) would spend on writing, signing and folding checks, stuffing them into envelopes and delivering the checks is very labor intensive. Not to mention the added hassle (and time spent) if a paycheck gets lost (or stolen) and has to be reissued. With over 80% percent of the workforce being paid by direct deposit, you should consider this time-saving payment method if you haven’t already.
After all, just like all the other services you utilize a PEO for, you and your employee’s time is better spent on your company’s business-building activities, not administrative minutia. Direct deposit also saves on employee absenteeism since employees no longer need to take time to deposit their checks or worry about identity theft with stolen paper checks. Anything you can do to better allocate your employees work time (or their time off the job) is always appreciated. Employees will greatly appreciate the fact that they don’t need to be in the office to get paid. And, who doesn’t love getting a paycheck deposited while they are on vacation or taking a sick day?
Direct deposit also allows employees to direct funds to go to retirement savings plans, split it between multiple accounts, pay their bills faster and view their pay statements online 24/7. And, of course, having a paperless payroll system helps company reduce their carbon footprint.