While you might have great knowledge of your craft or items you sell, you likely don’t have experience in HR matters or payroll processing. Whether you have one employee or 100 employees, you are required to adhere to approximately 180 Worker Protection laws, rules and regulations set forth by State Labor Law, Federal Labor Law and, OSHA and many others such as Business & Professions Codes and Health & Welfare laws. You wouldn’t go to court without a lawyer. Hiring a payroll service to provide payroll services and best HR practices may keep you from needing a lawyer as well as providing peace of mind.
What is a Payroll Service?
A payroll service is a third-party company or service that can be engaged to handle the processing of payroll as a single service or can be engaged in providing HR services, advice and even benefits programs for your employees.
Payroll services help owners stay compliant by maintaining records, monitoring worker hours, and paying proper overtime rates. Many offer cloud-based software that allows you and your employees to accurately track employee time, wages paid, benefits, deductions and more. They can help you adhere to mandatory rest periods and avoid expensive Labor Board filings against your company. Most offer a time and attendance system that allows you to keep track of employee schedules. Many can integrate with accounting software like QuickBooks or other accounting systems.
Payroll services will pay employees for you through paper checks or by Direct Deposit. They will file tax reports for you and keep you compliant through proper deductions for Federal, State and Local taxes and tell you how much to pay each agency and when. If you have a paid leave program or other benefits, the payroll service will administer it. They can also handle garnishments, tax withholdings, and provide valuable advice in hiring and termination.
Payroll Taxes and Regulations
Tax laws for employees change all the time and tax rates change every year. A payroll service can help business owners stay on top of tax law changes, knowing which forms to file, which payments to make, when to make them as well as properly classifying employees. A misclassification could cost hundreds of dollars in Worker’s Comp premiums based on an incorrect classification. Taxes and regulations are much more complicated than most people realize.
Employees expect you to complete the proper tax withholdings and amounts. They likely have no idea what the amounts are but trust you are forwarding the withholdings to the collection agencies such as Federal, State and Social Security taxes. Payroll services will make sure accurate paychecks are delivered to each employee on time, every time with the accurate deductions/withholdings on each paycheck. Overtime payments will be calculated accurately according to labor law. If an employee’s wages are garnished, payroll services will handle the proper withholding and forwarding the collection to the levying agency.
Payroll services provide apps that streamline the onboarding process by collecting required data directly from employees without the need for you or other staff members to gather documentation. This frees you to focus on your business while employees can enroll in benefits, change addresses or phone numbers, request time off and track their own time worked through a self-serve app.
Legal Right to Work
You may know what an I-9 Form is. Seldom do small to medium size employers take the extra step to verify the legal right of an employee to work in the United States. Payroll services offer verification services that can even include criminal background checks and verified eligibility to work. A good payroll service can make sure you don’t run afoul by hiring an undocumented alien.
The laws for protecting employee data are extremely strict. Personal data is protected by many agencies, including the Department of Transportation which requires all commercial driver files to be kept under lock and key. Payroll services have secure technology to protect employee records and allow access only to persons authorized by you. This keeps you in compliance with important employee confidentiality regulations.
Multiple Payment Methods
Payroll services can issue paper checks, Direct Deposits, pay cards or other alternative payment options. Payroll can be set up for different employees on different days and can be paid on-demand, daily, weekly, biweekly or monthly.
How Much Does It Cost?
Payroll services offer pricing of all kinds. From a flat rate of $20 per month to $5 per employee per pay period. Compared to the savings of time, energy, potential payroll errors, labor code violations and missed tax filings or payments, the amount is negligible for most businesses when compared to the benefit offered to you as an owner and your employees. You’ll never have to worry about tax code changes, labor law changes or other HR matters. Payroll services can help employers save money, comply with tax laws, avoid penalties, and reduce worries and headaches about payroll and compliance. If you’re ready to eliminate the hassle of HR and Payroll duties, Aurora Payments can help.