| Even the most meticulous and experienced human | | | | checks, and providing management reports. |
| resources professionals find that handling payroll can | | | | Paychecks can be issued on a weekly, bi-weekly, |
| be a headache. For many small businesses, payroll | | | | monthly, semi-monthly or yearly basis. |
| services offer an attractive and valuable alternative to | | | | Additional payroll-related services that may carry |
| in-house processing. They can provide a less | | | | separate fees include automatic check signatures, |
| expensive, simpler means of paying employees, filing | | | | direct deposit, and handling of W-2s. Many services |
| taxes, and performing other essential but mundane | | | | now offer tie-ins with 401(k) and Section 125 mutual |
| tasks. | | | | fund plans, allowing employees to set up automatic |
| Is a payroll service right for your small business? | | | | deductions from their paychecks. |
| Extremely small firms with a stable, salaried staff and | | | | Many small business payroll services offer the option |
| minimal changes in tax obligations may well be better | | | | of filing state and federal payroll taxes for your |
| off processing internally; it can be more convenient and | | | | business, as well. |
| cost-effective if your needs are straightforward. | | | | How does it work? |
| However, even for small businesses, processing | | | | Each pay period, payroll data has to be "called in" to |
| paychecks internally is not always as cost-effective | | | | the payroll service provider. While this used to be done |
| as it appears. At minimum, it costs valuable hours of | | | | via a phone call or fax, almost all data is now |
| employee time every pay period plus expensive | | | | transferred electronically. |
| accounting software and training. In addition, the person | | | | The standard method is by modem. The provider will |
| who handles your payroll needs to keep up to date on | | | | supply software for tracking each employee's pay |
| changes in personnel, deadlines, and tax requirements. | | | | rate, deductions, and vacation time. You simply enter |
| Without the proper knowledge of payroll procedure | | | | the relevant information for that pay period, and |
| and access to a sound payroll program, it is easy to | | | | information is automatically transferred to the payroll |
| make mistakes. | | | | service provider. |
| Payroll outsourcing can be an affordable way to | | | | Some providers also offer Web-based payroll data |
| remove this burden. If your employees work varying | | | | entry. You enter employee information on a secure |
| amounts of hours each week or if you have significant | | | | Web page, which feeds directly to the provider. This |
| turnover, a small business payroll service can be a | | | | method is gaining acceptance, but is still less popular |
| time-saving and cost-effective alternative to internal | | | | than modem-based communication. |
| processing. Using a small business payroll service can | | | | How much does it cost? |
| also be helpful if you have to pay payroll taxes for | | | | Basic small business payroll services typically cost |
| multiple states. | | | | between $3 and $5 per check, including add-on fees |
| Even if your payroll expenses are quite stable, | | | | for direct deposit, tax filing, and check delivery. |
| companies with more than 10 employees may find that | | | | There are often fees for adding or dropping |
| the time saved by outsourcing payroll easily makes up | | | | employees, adjusting employee information, and setting |
| for the low costs. | | | | up your account, and these fees can differ |
| What do they do? | | | | dramatically from provider to provider. Make sure you |
| Small business payroll services typically handle a range | | | | are looking at comparable pricing when evaluating |
| of payroll tasks, including calculating paycheck and tax | | | | different providers. |
| obligations for each employee, printing and delivering | | | | |