Hiring your first employee? You have 3 payroll options…
Here’s a quick overview on what to expect, the tasks involved and your payroll options.
Do it on your own… / Get software support… / Outsource to a 3rd party…What you can expect…
Each payroll period, you mustaccurately calculate applicable taxes & deductions…
Then, you must produce professional paychecks in a timely manner…
Preparing and filing the correct IRS tax forms are critical…
Finally, integrating payroll data into your accounting ledger is important, too. / · Manage and own the process from top to bottom, on your own
· Ensure you have up-to-date tables
· Calculate taxes and rates
· Determine accurate deductions
· Enter data into your system
· Process checks by hand
· Fix errors manually
· Collect all paperwork from the year – grab your calculator
· Get the forms from the IRS
· Enter the correct sums by hand
· File manually with the IRS
· Integrate both payroll data and general accounting data by hand
· Develop end-of-year reports manually / · Get professional software support, but control tasks yourself
· Enter employee information one time only, at time of hire
· Hit a button, get accurate info
· Correct your mistakes easily
· Click and print checks
· Fix errors easily with a few clicks
· Calculate? No need. Your software does it for you
· Fill out forms? No need. Your software provides the forms and automatically populates fields
· Print and send to the IRS
· Easily integrate all data into detailed reports based on specific needs / · Transfer complete data to 3rd party, let them handle everything
· Call in employee information one time only, at time of hire
· Call back each time if you’ve made a mistake, or with any changes
· Company will mail out checks
· Deal with delays if there are errors
· Company already has employee data
· Company may print and file forms with the IRS for you, depending on what service you’ve bought
· Company has control of your data
· You must request data in report form
· If you use accounting software, you'll have to re-enter the data yourself
Get the 3 C’s: Convenience, compliance and costs... / Get the 3-Cs. / Get the 3-Cs. / Get the 3-Cs.
Option 1
The 3-Cs: Do it on your own…
Convenience: Doing payroll yourself is definitely doable, although it requires a great deal of time and effort. Because of this, it is not as convenient as using Intuit Software or outsourcing to a 3rd party.
There is a lot of initial research involved. There are a lot of legal forms and applications you must submit. In addition, you need to create several internal processes to ensure that you are covering your payroll obligations and responsibilities.
Conduct your research thoroughly. Start online with Google and simply enter, “payroll options” or “how do I pay employees?”
Compliance: There are state and federal payroll obligations you must follow in order to avoid future legal hassles that could have severe consequences for your business. Make sure you follow the rules! Start with www.irs.gov -- they’ll point you in the right direction.
Costs: What is your time worth? Remember, doing it yourself is extremely time and work-intensive. On top of that there's a higher chance for making a mistake and getting penalized for it.
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Option 2
The 3-Cs: Do it on your own…
Convenience: Definitely doable, but requires lots of time and effort. Not as convenient as using payroll software or outsourcing to a 3rd party.
Many legal forms and applications must be submitted. Internal processes must be created. Make sure to cover all payroll obligations.
Conduct research thoroughly. Start online with Google and enter payroll.
Compliance: Lots of state and federal payroll obligations to follow. Avoid future legal hassles by following the rules. Start with www.irs.gov to get moving in the right direction.
Costs: What is your time worth? Think about the time involved, and potential penalties for mistakes.
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Option 1
The 3-Cs: Get payroll software support…
Convenience: When you need professional guidance and support – but still want the flexibility and control of doing payroll yourself – turning to a reputable software company could be the option for you.
Accessing your payroll data at anytime and anyplace is one of the major convenience factors for employers who want guidance, but want to keep control of payroll in-house.
Compliance: Most reputable payroll companies, like Intuit, must stay current with new tax laws. Intuit automatically keeps these rates and withholding limits up to date, while automatically calculating employee federal and state tax amounts for your paychecks.
Costs: Intuit’s Payroll solution starts at $nn a month for up to 15 employees. You could pay more if you add on options like “E-File & Pay.”
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Option 2
The 3-Cs: Get payroll software support…
Convenience: Professional guidance and support offers the convenience of flexibility and control.
Access payroll data at anytime, anyplace. Keep control of payroll in-house.
Compliance: Payroll software support companies must stay current with new tax laws. Correct rates and withholding limits are part of the package, plus automatic calculations for federal and state taxes.
Costs: Many Payroll solutions start at $nn a month. You could pay more if you add on options like “E-File & Pay.”
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Option 1
The 3-Cs: Outsourcing to a 3rd party…
Convenience: If you are a small business, make sure you receive the attention you need when you outsource to a 3rd party payroll company.
Customer service is a critical factor here. With 3rd party services you telephone their offices under their deadlines and give them the hours, deductions, and salary amounts of your employees. They create your paychecks, and you work on their timeline.
Compliance: As an employer, you have many state and federal payroll obligations. Any third party company must stay current with new tax laws – or they wouldn’t be in business. Outsourcing to a 3rd party can help you stay compliant with these laws.
Costs: Expect to pay over $100 a month. You could pay more if you add on options like Direct Deposit or Check Signing. And the more employees you have, the more you pay.
However, if you feel that you can avoid hiring one additional employee by outsourcing payroll, then this may be the solution for you.
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Option 2
The 3-Cs: Outsourcing to a 3rd party…
Convenience: Send it all away to a 3rd party if you want nothing to do with payroll.
Customer support and hours of operation important for access to your data. Deadlines imposed. You work on their timeline.
Compliance: Any third party company must stay current with new tax laws – or they wouldn’t be in business. Outsourcing to a 3rd party can help you stay compliant with these laws.
Costs: Expect to pay over $100 a month. You could pay more if you add on options like Direct Deposit or Check Signing. The more employees you have, the more you pay.
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