The Benefits of Outsourcing Your Payroll

If it is not managed properly, payroll can be a huge headache for a small business and can many times lead to improper reporting of payroll taxes. With 1 out of 3 small businesses paying penalties to the IRS yearly, many owners look to outsource their payroll to avoid issues. Below are 7 reasons why it is a benefit to outsource payroll.

  1. With a well organized payroll service, you will not miss a tax deadline or pay the wrong amount.
  2. Your federal and state payroll filings will be handled for you – usually including 941/944 quarterly forms, year-end 940 forms, and W-2’s.
  3. Payroll information is usually maintained in one central location: employee records, past pay stubs, tax filings, and records of tax payments.
  4. Paychecks can be electronically deposited into employee bank accounts via Direct Deposit.
  5. Electronic transfer eliminates trips to the bank.
  6. You and your employees benefit from up-to-date pay stubs detailing current and year-to-date withholdings, vacation and sick time.
  7. Customization of reporting usually includes voluntary deductions by employees such as insurance, retirement plans, and  other items.

Outsourced payroll usually leads to more accurate record keeping and great cost savings by way of time and avoidance of penalties. If you think you may be too small for a payroll company or you can handle it yourself, think again. Talk to a payroll specialist to analyze your options.