Payroll Services Cost
Businesses can choose to handle payroll themselves or use a third-party payroll service to manage payroll for them. Using a third-party payroll service is often easier for companies that don't have an accounting background and don't want to expand their accounting department, but how much does it cost?
There are two types of payroll services: outsourced and online.
Outsourced payroll services are when companies hire a third-party accounting firm to handle all aspects associated with paying employees, including taxes and benefits. Outsourced payroll services can cost businesses anywhere from $0.80 and $2.00 per check, plus a base account fee. And adding extra services, such as tax-filing services, can increase that cost from anywhere between $4 and $9 each payroll period. There are also other fees that can be tacked on for things like adding or dropping employees, editing their information or setting up their account. This can definitely add up over time, especially for businesses with a lot of employees.
Online payroll services are tools that help companies run payroll themselves and reduce the chance for errors that could result in tax audits. Online payroll services are typically cloud-based SaaS solutions that are paid for on a subscription basis. The cost of the subscription will depend on the provider, but you will likely find online payroll services to be more cost effective than their outsourced counterpart.
Are Payroll Services Worth the Cost?
Payroll services are how businesses calculate how much employees have earned and pay them, and may also include:
- Withholding and filing quarterly taxes
- Issuing tax forms such as W-2s to employees and 1099s to independent contractors
- Filing payroll reports with the federal, state and local governments
- Reporting new hire to the government
- Keeping track of and letting employees request paid time off
- Administering benefits such as health insurance plans, retirement plans, and reimbursements
- Setting up and monitoring retirement plans such as 401(k) and IRA plans
This is a lot to handle for a single businesses, especially smaller businesses that don't have large accounting departments and have to manage salaried employees, as well as independent workers. Improper management of payroll services can lead to tax audits, legal issues and even bad publicity. So, in short, if you aren't equipped to handle them yourself, payroll services are absolutely worth the cost.
TalentWave's Professional Payrolling - EOR Services
At TalentWave, our payroll services extend to clients who have contingent workers who do not meet the definition of an independent contractor (i.e., the worker cannot be classified as 1099). Our popular Professional Payrolling service keeps your contractors content and efficient while shielding you from all the employer compliance risks and liabilities.
There's Much More
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