Processing payroll is not just about collecting employees' hours, calculating wages, and giving out paychecks. The payroll administrator must follow the local, state, and federal requirements.
They also need to include health care deductions, employee tax withholding, social security, and benefits of employees. If you hire a payroll outsourcing company in Perth to work with your team, it can prove to be an asset to your company.
Benefits of Hiring Payroll Services
The benefits of hiring payroll services for your company are as follows:
-
Reduce costs
If you consider everything that goes into processing payroll, i.e. printing checks, calculating pay, following the latest regulations, and maintaining software, it might benefit you to hire a payroll vendor.
You can easily calculate the financial commitment that you will make to run payroll in-house. It would help if you estimated the hours your staff spends on running payroll annually and then calculated how much they will pay them for this work.
If you use payroll software, you can add the costs associated with the tool and compare it to employee pay. Compare the total cost with the plans offered by payroll firms. If you are able to save money, you need to outsource.
-
Depending on the knowledge of payroll
Factors such as withholding rates, regulations, new forms, and payroll laws often change, and it affects your ability to process proper payroll. Keeping up with the changes can cost you a lot of time, and adopting new processes can be tough.
With the aid of a payroll outsourcing company, you will easily understand, adapt and execute changes to reporting needs, wage and hour taxes, and laws. You can gain access to a team of experts that can help you in payroll processing and following government regulations.
You can depend on such experts to keep an eye on the latest requirements and how they can affect your business. When there are changes, they will inform you and make the required updates in the payroll system.
-
Reduce risks and avoid paying fines and penalties
As per the IRS, about 33% of employers make payroll errors, and almost 40% of small businesses pay a minimum penalty of more than $800 per year for incorrect or late fillings/payments. Employers need to pay local, state, and federal income taxes, Medicare taxes, and unemployment taxes.
They also have to file payroll returns monthly, quarterly and yearly basis. As an employer, you might be familiar with yearly W-2 reporting. But additional reporting is also needed throughout the year for state/federal withholding and unemployment wages.
Reporting requirements may become more difficult if your employees work in different cities or states. If you do not meet the requirements, you may have to pay fines or penalties.
If you hire a payroll outsourcing company, they will ensure that nothing is overlooked and that returns are accurate and filed timely. There are chances that you make mistakes in payroll activities; this is why a payroll provider is needed to avoid errors and penalties.
-
Free up important staff
In the business environment of today, one individual can wear many hats. But you cannot have someone do payroll activities on top of their job duties, and sometimes they may feel overwhelmed and might issue incorrect payments to employees.
And if errors are made, you will need to pay fines and make your employees upset; nobody would want that. This is why working with an outsourced payroll firm can help make the process smooth and improve productivity. This will help to free up finance, payroll, and team members can focus on other essential tasks.
-
Gain access to technology
Technology limitation is an important reason why companies outsource. Your employees might not have access to tax documents, pay history and W-2s online. Third-party payroll providers use powerful technology and cloud-based tools that allow employees to gain access to information easily.
Most of these tools integrate with your accounting system and as per surveys, manually entering, and loading inputs can be a time-consuming aspect of processing payroll. With the help of software that automates manual tasks, the overall processing time can be lessened, and there will be less inconvenience of data entry.
Some payroll outsourcing companies offer extra features such as attendance/time tracking, applicant tracking, benefits enrollment, etc. This can help to save time, lessen costs and improve efficiency and security.
-
Improved data security
There might be various bad actors who threaten the business and employee security with theft and payroll scams. Many companies have security protocols in place to protect essential data and information from theft.
This is to protect confidential client information essential for the success of their business. It is important to prevent employee data from being compromised as attacks can cause identity theft.
Many payroll providers use cloud-based systems that can automatically issue monthly scans, encrypt clients' data, and install antivirus software. This is one of the most important benefits of outsourcing payroll, and you need to ensure that a payroll provider has the necessary system to protect your company's data.
-
Less stress
Processing payroll can be stressful as people's livelihoods are in your hand. While working with a third party, the experts deal with the inconvenience and stress of the payroll process. But even if you are outsourcing, your payroll responsibilities do not end.
Outsourcing can help reduce payroll work and transactional components, but in-house payroll specialists will still be needed for decision-making and driving policy.
You will also need to share employee information with your vendor and continuously manage contracts, which is still a huge weight off your shoulders. Outsourcing benefits can be extensive, but the main element of realizing these benefits is to hire the correct payroll outsourcing firm.
Hire a Payroll Outsourcing Company
If you do not want to be engaged in payroll and focus on other essential tasks, you can hire a payroll outsourcing company for bookkeeping services. They can ensure that payroll is done correctly, and with the help of advanced software, your payroll processing will be smooth
