THE ULTIMATE GUIDE TO OUTSOURCING YOUR PAYROLL SERVICESAre you considering outsourcing your company’s payroll to a dedicated payroll service company? Do you outsource now, but are unhappy with your provider’s level of service? Outsourcing with the right provider saves time and money while increasing accuracy, reducing errors and ensuring regulatory compliance.

Selecting the right payroll provider may seem like a daunting task, but it’s really pretty straightforward. This guide will provide you with all the information you need to make the right choice for your company.

HOW ARE YOU CURRENTLY MANAGING PAYROLL?

Are you currently doing payroll in house? Whether you or one of your

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employees handles it, you know how stressful and time-consuming it can be. Or maybe you’re already outsourcing but you’re dissatisfied with the level of service you’re receiving.

With the right provider, outsourcing is efficient, budget-friendly and accurate. This frees up you and your staff to focus on operations and other key business functions.

HOW OFTEN DO YOU PROCESS PAYROLL?

Businesses typically process payroll on a weekly, bi-weekly, twice per month, or monthly basis. Payroll services typically bill by the pay period, per employee, flat rate, or via a combination of rates. For example, your base pay might be $40 per payroll plus $3 per employee. When you review quotes from providers, be sure to take note as to how the billing would be calculated for your specific pay cycle.

HOW MANY EMPLOYEES ARE ON YOUR PAYROLL?

The number of employees on your payroll will affect

the cost of outsourced payroll services. Most payroll services charge a fee based partly on the number of employees. For companies with large staff, many providers will offer a discount on the per employee charge.

Some businesses may go beyond traditional employment and also take on freelancers or temporary workers. If this is the case, a good payroll service can handle payments for independent contractors and freelancers, in addition to your regular payroll and taxes.

ARE YOU INTERESTED IN ANY ADDITIONAL SERVICES?

Think about your needs beyond payroll. Some providers offer a wide range of service offerings - from simply issuing paychecks and handling taxes, to providing highly comprehensive workforce management solutions.

Payroll services often offer different tiers of services, ranging from basic packages at a low cost to more comprehensive

for garnishments and for benefits like health insurance and social security.

• Payroll taxes: Payroll companies will accurately calculate your payroll taxes and pay them on time. This is a huge benefit to you because the IRS can assess significant penalties if your taxes are paid just one day late. Payroll companies will also print your W-2s at the end of the year.

• Paid time-off management: Some payroll platforms will track employee PTO time.

services at a higher price point. Even though a larger package has a higher sticker price, it will likely save you money in the long run allowing you to have a smaller internal staff.

WHAT DO OUTSOURCED PAYROLL SERVICES OFFER?

• Payroll processing: A payroll service calculates wages and taxes, including overtime and holiday compensation, and issues payments via direct deposit or traditional paper checks. It can even process deductions

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This both digitizes and streamlines the process employees go through to check available hours and request time off.

• Reporting new hires: When your company hires a new employee, the service will handle the required government reporting.

• Payroll reports: Reports let you see payroll history and other details like tax information, payroll costs, vacation and sick leave, and worker’s compensation. Payroll reports help you keep an eye on short- or long- term patterns in your

company’s payroll history and provide you with details that can be used for important business decisions.

• Regulatory compliance: It can be challenging to keep up with complex payroll tax laws and regulations. Worst of all, failing to comply with regulations, even accidentally, can result in large fines that are costly to your business. Luckily, payroll providers are experts on payroll tax laws and stay up to date with changes for you.

FACTORS IN CHOOSING THE BEST PAYROLL SERVICE?

• Features: Payroll service providers offer a range of features. Think about your company’s needs, now and in the future. Beyond issuing paychecks and processing taxes, payroll providers may offer options like PTO integration, benefits deductions, wage garnishments, background checks, drug testing and pay-as-you- go worker’s compensation.

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• Usability: Submitting your payroll shouldn’t be a pain. A simple and intuitive user interface is ideal for day to day to use. Ask to see a demo of a provider’s platform Is the system straight forward and easy to use? What sort of tech support is available if you run in to trouble?

• Cost: Think about your budget and what sort of resources are currently dedicated to paying your staff. Whether you do it in-house or outsource it, is the cost worth it? Are you getting your

money’s worth? As you research providers, you will find an array of pricing.

• Reputation: When scouting for a company to handle your payroll, do your homework. What do customers say about them? Read reviews and ask for references. How long have they been around? Are they friendly, approachable? Are they going make your business better? Your payroll provider should make your life easier.

• Support: At some point

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you may run into payroll issues. When problems arise, you want your payroll provider to have your back. What kind of support does the company offer? Do you have a dedicated representative to work with? Are service representatives based in the United States?

• Employee self-service: This feature allows employees to log in and view information like pay stubs, W-2s, and paid-time-off balances. Employees like it because they can access their data. Employers love it because they no longer get employee requests for the last pay stub, etc. If your business employs workers who perform their jobs remotely or travel frequently, employee self-service is a must.

SECURITY

As you know, payroll information contains sensitive details about both your employees and your company’s finances. When you put your trust in a payroll service, you must be confident they will keep that information secure.

To keep your data safe, payroll services will utilize a variety of measures including backup systems, on-site security at their server locations, and cutting- edge security technology. Additional methods include encrypting banking information and social security numbers, using secure email systems, monitoring for suspicious activity, password protecting files, and communicating only with authorized payroll account users.

PAYROLL FAQS

Will the services integrate with pre-existing services you currently use for accounting and human resources? The answer depends on which services you already have and the capabilities of the provider you are considering. Talk to the payroll representative about the systems currently in use.

If a mistake is made, who is liable for it? Some payroll providers offer a no-fault guarantee. This means if a mistake is made, even by you or your staff, they will fix it at no charge. Other providers charge fees based on the error. Ask your prospects what their policy is on errors.

Do the fees increase from year to year? Some services will let you lock in a certain price while others will raise fees from year to year. Be sure to ask the representative what their policies are regarding price hikes and how they’ve historically handled this with other clients.

How’s their customer service? How fast of a response can you expect if there’s an issue? A great payroll company is not only accurate, it’s accessible. If an issue arises you need to be able to get help, fast. Look for a provider with a dedicated service team assigned to your account. Avoid call centers, if possible. An affordable concierge-style payroll provider can give you the customer service that means the difference between payroll paradise and payroll purgatory.

Can service begin mid-quarter or only at the beginning or end of the quarter? You can switch to a payroll provider any time of the year, although the first of a quarter is optimal. This allows the provider and your company to start with a fresh slate because most payroll tax returns are due quarterly.

What contract lengths are available? (i.e. monthly, quarterly, annually) Different services will handle their contract cycles differently. Some may let you begin with a monthly contract so

you can get a feel for their service. Others may ask you to commit for a year or more right away. Some services offer incentives for long-term contracts while others do not. Decide what works best for your company’s needs before you go into the negotiation process.

Who is responsible for filing payroll taxes? If your company is currently handling payroll in-house, that means your human resources team is responsible for handling all payroll functions. This includes issuing paychecks to employees, withholding taxes, and issuing W-2s. While this can technically be done in-house, doing so can be both labor intensive and costly.

An outsourced payroll service handles all these functions and more with efficiency and accuracy, often at a lower price point than your in-house team. Outsourcing payroll services will also ensure compliance with tax laws and regulations, so you don’t need to worry about being penalized for non- compliance.

In addition to these benefits, some payroll services have an error-free guarantee, meaning they will resolve and pay for any errors that may occur on their end. If you are at all concerned about the accuracy of payroll and tax processing, this type of guarantee can help put your worries at ease.

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BOTTOM LINE...

We hope this guide gave you a stronger understanding of what a payroll provider does, what specific services it can offer you, and how it can benefit your business. A great payroll provider will simplify your entire payroll process. Some companies may only need a basic service tasked with accurately issuing paychecks and handling taxes. Other businesses flourish will the adoption of comprehensive workforce management solutions that handle not only paydays and taxes, but also new-hire onboarding and employee benefits like health care and retirement.