What is a Payroll Service?
Payroll Service is defined as the third-party services acquired for the sake of your business's ease, whereby the service provider offers you payroll processing of your employees, tax deductions and filing of the same, and other pivotal activities.
Companies often avail such services for burden reduction purposes upon their HR division and to minimize the errors in calculation making sure that primarily the employees and the taxes are paid timely avoiding any financial injustice as well as government regulations’ violation, respectively.
What are the benefits of payroll service?
Payroll services perform the following unavoidable vital tasks for your organization:
- Time-bound and accurate payment of salaries and wages to your workers
- Workers’ attendance maintenance
• Calculate payroll taxes
• Deposit information to government agencies on your behalf
• Knowledge management for you in terms of the Federal and State laws regulating payroll taxes etc. and changes from time to time
• Tax cut from the wages
• Emailing your employees' tax forms
• Depositing the payroll calculated taxes into concerned government offices
- Direct deposit administration, if any
- Tracking employee attendance (add-on)
- Calculation of wages
- Third-party benefit integration, if applicable
- Analyzing time and wage info
- Evaluation of employee compensation revisions, if any
- Payroll State and Federal Compliance and updates
- Application of employees 401(k) plans
- E-record keeping of your employees in terms of their:
• Date of joining and onboarding
• Number of years experience
• Pay raises
• Bonuses, and
• Everything related to financials
- Payroll service simply streamlines your process payroll as per the standards in vogue and policies in practice so far as the government regulations are concerned.
- They auto-track your employees in and out via technology and that helps you to focus on strategic visionary plans and their decision-making.
- Employee self-service provision by payroll service providers for employee ease of tracking their financial records for personal and official purposes
- On-the-clock monitoring of employee time and attendance through chips, thumb impressions, cards, online electronic time tracking, etc.
- Things are made simpler and more professional by such a service provider.
What are the potential disadvantages of purchasing a payroll service?
The following should be considered and avoided to keep from potential disadvantages of a payroll service:
- Employees' data may not be safe
- Organization(s) may face tax penalties due to late information returns filing
- Expensive services so far as the small companies are concerned
What are the features to consider when hiring any payroll service?
The following features must be taken into due consideration before selecting any payroll service:
- Features offered: Features concerning finances but Human Resources should be looked into how ease a service provider can offer you
- User friendly: How much Ease of use a service may provide you
- Market Reputation: Track record of the service provider
- Data secrecy policy: Is your own and your employees’ data secure with the payroll company you are going to avail service for payroll from
- Security cleared: If the services are being / to be hired for Military workgroups
- Affordability: Do a cost versus benefit analysis and see if is it worth purchasing or otherwise
- Viability of integration / Benefits Admin: The payroll software/service you hire should have a viability of integration with other processes like HR, Budgeting, Job costing, job analysis, Business management tool
- Compatibility: You need to look for the payroll system/service that is compatible with you or not in terms of everything deemed necessary
- Customer Support: See what customer service tools are provided therein
- Time management: Look into how much of your organizational time can be saved if you hire payroll service and how much timelines can be followed by the service provider
Do you need a payroll service?
Ask yourself do you need a basic payroll service or if it is feasible for you to do it on your own if running a small business.
If you have certain questions in mind, it may help you to make the right decision at the right time. Those questions can be:
- How many employees do you have with you
- How often you pay your workers:
• Any other
- What are the cost versus benefit analysis conclusions for you in terms of hiring such a service or otherwise
What IRS have to share with you regarding Payroll Services?
Internal Revenue Service (IRS) is the United States official body to issues government rules, policies, and laws about Social Security, Payroll, Medicare, Retirement, Tax Returns, Regulate tax returns, it states inferred as undermentioned:
Very Important Note: Employers need to know that as per IRS hiring a PSP does not relieve you from tax obligation(s) or employment tax liabilities.