Payroll is a necessity for any business – you have to pay your employees, make the right tax deductions and then get everything paid and filed on time. This is a big task for small business owners and isn’t how you should be spending your time. Outsourced Payroll Services are helping businesses in Denver save time and money.
What Is Outsourced Payroll?
Outsourced payroll services is simply the use of a service provider to handle the administrative and compliance functions of paying employees. It is important to note that payroll services are only that, and do not offer a local employer of record for the foreign company. This means that local incorporation is still required, and the other aspects of employing workers must be handled DIY or by other experts.
Why Do Companies Outsource Their Payroll?
Running an in-house payroll can be a challenge for smaller companies or a business without HR and accounting professionals on staff. Outsourcing is one method to avoid hiring additional employees or contracting with specialists. Below we have listed some of the benefits of outsourced payroll services
- Cost savings by avoiding the need to use in-house resources to comply with complex payroll requirements
- Ease of ongoing administration of payroll through changes in personnel, reduction or increase in compensation structure and filing of reports to government authorities
- Avoiding mistakes and tax compliance penalties
What Payroll Functions Will A Company Perform?
Depending on your business’s needs, a company may customize the outsourced payroll services while retaining control of other aspects. The payroll functions typically outsourced to a third-party provider include:
- Running payroll and making employee pay and withholding calculations
- Depositing funds directly or issuing checks to employees
- Calculating state and federal payroll taxes, and making tax withholding payments
- Filing required government reports
- Administering employee benefits
- Withholding social security and pension contributions
When Should My Business Outsource Payroll Services?
While the majority of U.S. businesses process paychecks internally, this is not always cost-effective. At minimum, internal payroll processing requires the purchase of a computer or manual accounting program and extensive training to use it. In addition, businesses need to keep up to date on changes in personnel, deadlines, and tax requirements on an ongoing basis.
Using a payroll service generally makes sense if your payroll changes with each pay period. If your company has employees working varying amounts of hours each week or has a significant turnover rate, a payroll service can be a time-saving and cost-effective alternative to internal processing. Using a payroll service can also be helpful if you have to pay payroll taxes for multiple states. On the other hand, if your payroll expenses are quite stable, you may find handling payroll internally to be just fine for your needs.
Questions To Ask Your Payroll Service Provider
There are a few key questions to ask any payroll provider prior to outsourcing, to minimize any issues with service quality:
- What are the basic and/or add-on services offered?
- How do they secure confidential employee and payroll data?
- How many clients do they have and for how long?
- Do you calculate tax withholding for each employee?
- What rates do you charge for running payroll per employee, and is there different pricing for higher volume?
- Do you assist with generating tax forms for local tax filing purposes?
Limitless Investment and Capital Outsourced Payroll Services in Denver
Small business owners spend an average of eight hours a month performing payroll functions. That’s 12 full days a year that could be spent generating sales, prospecting new business opportunities, improving products or services, or servicing customers. We help you stay compliant while significantly reducing in-house staffing needs and costs. Interested in outsourced payroll services in Denver? Contact us today!