Although some businesses still practice in-house payroll processing, it often comes at the expense of inaccurate calculations, delayed payments, tax-related penalties, and difficulties staying aligned with state and federal regulations. In-house payroll can also detract from employee time spent on more pressing and high-priority tasks that help a business grow.
Outsourcing payroll grants employers access to expert support and timely, accurate processing that remains fully attuned to regulatory changes and new tax laws. In this article, we’ll explore how a qualified payroll provider can ensure that all of your business’ tax and compliance concerns are handled responsibly and your payroll adapts in real-time to updated regulatory requirements.
What’s Included in Payroll Outsourcing?
Payroll processing is a complex and multifaceted process, which is why many businesses elect to outsource some or all of the key functions to qualified experts. Here are some of the responsibilities that a payroll provider inherits when you outsource payroll:
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- Establishing a company payment method, whether it’s automated direct deposit or traditional paychecks. Your provider can also assist you with determining the ideal pay frequency for your employees.
- Ensuring that electronic funds transfer (EFT) is established to deposit all federal tax deposits (an IRS requirement).
- Importing and organizing all employee payroll information to process individual payroll for each employee and create consolidated employee accounts.
- Income and payroll tax withholding
- Completing employee deductions ranging from health insurance to workers’ compensation and other fringe benefits, ensuring these deductions are accurately reflected in the employee’s payroll record or pay stub.
- Collecting, reporting, and completing all year-end declarations and tax forms for filing with local, state, or federal authorities
- Remitting owed payroll taxes. Even though the employer is ultimately responsible for required payments, payroll outsourcing streamlines the process and increases accuracy and timeliness.
- Ensuring that payroll practices align with all established or forthcoming regulations (local, state, and federal) and making adaptations as needed.
The Major Benefits of Outsourcing Payroll
In addition to specific logistical, financial, and tax-related benefits, outsourcing payroll can also lead to wider benefits for your entire business.
Reduced Costs, Reduced Time Spent, and a Renewed Focus on Your Mission
In-house payroll processing requires accounting software, software updates, computer equipment, printing equipment, routine training of staff, and dedicated monitoring of all new local, state, and federal regulatory changes.
Beyond these more obvious expenses, your employees are also left investing valuable time manually processing calculations, deductions, deposits and other payroll data. This invariably leads to time lost on key, revenue-creating projects and increased risk of noncompliance or liability in the event of an underpyament, employee dispute, tax reporting error, or another event.
Outsourcing to a qualified provider significantly reduces costs, increases the accuracy of your payroll, and eliminates employee time spent managing these payroll data and compliance concerns.
Compliance Peace of Mind and Expert Support
While in-house payroll often requires employee training or the extension of job responsibilities for multiple employees, a qualified payroll provider grants your business consistent access to payroll experts with years of experience. Outsourced providers can work confidently across a range of jurisdictions and with a thorough understanding of payroll regulations, tax requirements, and all other compliance-related considerations.
Since local, state, and federal regulations change frequently, it’s essential to have support from a trustworthy provider that can help you adapt to shifts in tax, immigration, anti-discrimination, insurance, and labor laws. This helps your business permanently bypass penalties or audits, but it also leads to improved employee satisfaction, establishing employee trust in timely payments and overall payroll management.
Reliable and Adaptive Payroll Processing with Workforce PayHub
Staying up-to-date with regulatory and legislative changes while handling the day-to-day responsibilities of in-house payroll can be overwhelming. That’s why Workforce PayHub provides payroll and human capital management solutions to help you manage your most valuable asset: your workforce. Our comprehensive payroll solution is designed to support you and your employees so you can focus on your mission and approach each pay period (and tax season) with confidence. Contact us today to let us know how we can support your work.
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