The platform provides automated, full-service through its AutoPilot payroll software for both employees and contractors—and even offers a low-cost contractor-only plan. It facilitates employee benefits including health care, employee financial wellness, retirement plans and more. We reviewed 24 payroll services using a detailed methodology to help you find the 9 best payroll services for small businesses. Our ratings consider factors, such as transparent pricing, employee self-sufficiency, compatibility with third-party integrations, access to customer support and ratings. If you do not want to outsource payroll, consider using software to process your employees’ payments and taxes.
Make sure you set aside the right amount from the employee’s gross wages and from your own business account to pay these required taxes. Employee payroll taxes are withheld depending on where the work is performed payroll fraud and apply to employees who commute between satellite offices. Explore Beti to learn why it’s the ideal choice for outsourcing payroll to Paycom. This doesn’t mean run your own payroll while you’re outsourcing it.
How long does payroll take to process?
The payroll system should be able to handle these payouts in addition to off-cycle payments like expense reimbursements, bonuses, commissions, etc. Payment structure and taxation requirements for each of them differ and you need to know these numbers to evaluate your payroll needs. If you have only independent contractors, you might be able to meet your needs using an online payroll system, which is usually cheaper. Through this so-called co-employment relationship, TriNet bears some of the legal liability as an employer, which can save you some headaches in case of employment issues. It also takes on 100% of your HR duties, so you don’t have to hire an HR or legal expert in-house.
Finding a trustworthy third-party provider goes a long way, but a company can’t just pass off any payroll mistakes that arise as the fault of its provider and move on. The client company also remains liable for tax remittance whether or not it has outsourced this particular payroll function, meaning it’s on the hook for any errors even if it’s not immediately responsible. In the early days of strategic outsourcing, companies were most comfortable hiring away low-skill tasks distant from sensitive business areas.
This frees you and your team up to focus on more core functions like actually making sales and developing your products and services. For partial outsourcing of this process, the provider takes care of most of the technical aspects. The rest of the more administrative tasks, like tracking time and updating worker information, fall to someone within the company. Employers need to file wages paid to employees, taxes withheld, Social Security and Medicare deductions and employer’s contributions to Social Security and Medicare.
- Businesses are moving away from hiring outside vendors or payroll services for payroll operations, preferring to keep these functions internal.
- These are wages paid for hours worked above the 40-hour work week.
- Today’s payroll processes can be time-consuming and stressful, which is why 73% of organizations have turned to payroll outsourcing.
- While different companies will have different criteria for evaluating a good match, they all must ensure a provider maintains adequate protections for employee data and complies with relevant regulations.
- With the right payroll outsourcing provider, you can maintain high levels of security and privacy, while helping your organization manage changing requirements and reduce risk.
You’ll also need to make sure that you have an employer identification number (EIN). You will also most likely need a state tax number from the state’s tax assessor. Payroll will run a lot smoother if you have the correct documentation on file for your employees. This means that you need every employee to complete a Form W-4 that documents filing status and records their personal allowances. Beti cut payroll-processing labor by 90%, a Total Economic Impact study conducted by Forrester Consulting on behalf of Paycom reveals.
How To Do Payroll in 8 Steps
While it may seem like a lot, it’s actually a huge saving from what it would cost to hire a full-time payroll/HR employee in-house. If you run a weekly payroll for a company with 10 employees, the monthly cost can range widely anywhere from $0 to $300+ depending on the pricing plan options. Some vendors offer more features or charge extra (pricing by number of payroll runs or charging extra for year-end tax forms), so costs could run more than $400 for this size of company. Payroll software is more of a DIY tool rather than an outsourcing service, but many offer full-service solutions with customer support. Payroll software can be a great solution for business owners who are open to keeping part of the payroll process in-house and can often be one of the cheapest options.
Best for Automating Processes
To save even more money, consider using a free payroll software solution. Allowing a third party to direct company funds and manage highly sensitive information may once have been unthinkable. See our top-recommended PEO companies for small businesses for more information on each provider and other high-ranking PEO options. A PEO actually hires your employees and then leases them back to you. It adds your employees into a pool with its other clients’ employees to drive down benefit costs so it can offer affordable premiums.
Keep these needs in mind as you seek out the right payroll service. A high-quality payroll outsourcing service will provide you with a full suite of features for running payroll efficiently. Simple outsourcing options allow you to manage payroll data from a phone or desktop application, while higher-value options allow you to connect directly with professional support. Hiring a third-party service provider means you’ll need to share your workers’ information. Before you hire a payroll provider, make sure to have a proper DPA in place, if necessary, to avoid potential legal issues in case the outsourcing service mishandles the payroll data.
Despite fewer employees, it’s still hard on tight HR teams — some made up of just one person — to accurately run a small business’s payroll. For midsized organizations, it can be unreasonable to dedicate one employee to the process (or burden an HR pro with it on top of their current responsibilities). Some platforms, like QuickBooks, allow you to select from a variety of payroll processing plans. This gives you more flexibility when choosing different levels of service for your organization. It’s critical that you research each plan’s features and price point. Many providers do the toughest parts of payroll, while leaving basic admin to you.
This usually means setting up an account on their platform to grant access to your current payroll information. It’s vital to complete tax-related tasks accurately and make payments on time, whether to the state or your employees. That’s why the first thing you should consider when hiring a payroll outsourcing provider is establishing trust. Payroll providers can also handle payroll taxes and ensure you comply with local tax regulations, regardless of where employees are from. You may need to supply specific tax forms and other necessary information about workers, like their Social Security numbers or Tax Identification Numbers (TIN).
Deduct all the tax withholdings and deductions from the gross pay. This leaves you with the net pay, which is the amount that the check should be written for. You’ll need to withhold federal and state taxes for each employee based on their allowances.