Payroll Services for Small Business

Payroll is a relatively simple concept to understand:

1. Employers agree to compensate an employee for services provided (Gross)
2. Employers withhold a portion of the earned compensation while paying directly to 3rd party providers
   for expenses including but not limited to: health insurance, 401(k), workers' compensation, FSA, etc.
   (some of these items are paid with pre-tax income).
3. The government gets its share through social security, Medicare, federal, state and local taxes.
4. Employees collect the money remaining after taxes & withholdings (Net).

Seems simple, right? Not so fast. Here are a few things to consider:

1. Employees receive bonuses, work overtime hours, and/or miss work. In turn, compensation changes from week-to-week and you need to account for this accordingly.
   1. Payroll taxes are always changing, at the national, state and local level — and it is incumbent on YOU to keep up. Oh, and if you’re late with a payroll tax payment, you could get fined.
2. Withholding amounts change (401(k) amounts, insurance costs, etc.) and you need to ensure that every 3rd party providers receives their funds in a timely manner.
3. Above all else, employees are not happy when their payroll inaccurate. Mistakes can lead to morale issues and turnover.

For these reasons among others, small businesses just like yours opt to outsource their payroll. But remember, not all payroll services are created equal. It is important to consider all factors when choosing a payroll services provider.