How Do Payroll Companies Work?
An estimated 45% of business owners use payroll services.
Why?
Because payroll is complex. Your employees want to be paid in a timely manner without errors or delays along the way. Businesses also need to adhere to strict wage and tax law requirements that change often.
If your business is growing and you want to free up time and resources, hiring a payroll company is one of the best decisions you can make. How do payroll companies work? How much do they charge?
Let’s find out.
What Tasks Do Payroll Service Companies Handle?
Payroll companies do more than just deliver basic payroll calculations. They leverage technology to help business owners save time on administrative tasks, avoid common payroll mistakes and create positive experiences for employees.
For example, at Redmond Accounting, we use Gusto for these very reasons. Clients save so much time and get peace of mind that a team of experienced accountants is handling their payroll.
Payroll companies can handle a number of tasks, including:
Tax Withholding
Automated payroll processing systems ensure things like taxes, garnishments and payroll deductions are accurate, withheld from employee pay and paid on time.
Payroll companies ensure that tax withholding is stress-free and accurate, so you can spend more time on what matters: growth.
Tax Filing
Payroll service providers can also take care of filing federal, state and local taxes. They can help with preparing W-2 and 1099-NECs as well as year-end reports. Taxes are filed automatically and on-time, which reduces stress while saving time.
Employee Self-Service
Many payroll companies also have employee self-service features. For example, with Gusto, employees can:
- Enter their own details right on the platform
- View their W-2s and Paystubs anytime
- Make charitable donations directly from their paychecks
- Take advantage of direct deposit
Self-service features like these save businesses time and empower employees.
Compliance
Payroll is more than just running numbers. Your business must meet strict compliance rules and regulations. If you don’t stay on top of key changes, you can face serious consequences for not following:
- Wage laws
- Tax laws
Your provider, and even some cloud-based platforms, will provide compliance updates that you can follow. If you hire a professional to conduct payroll, it’s their responsibility to ensure that you remain compliant.
Payroll Reporting
Stakeholders love to scour through payroll reports, and they’re a great way to manage your employee expenses. Payroll service companies will provide detailed reports so that you can view the following information at a glance:
- Wages
- Taxes
- Hours worked
Working with a professional payroll service will allow you to scale your business without the headache of running payroll on your own.
How Much Do Payroll Services Cost For Small Business?
Small businesses should outsource payroll as soon as possible because it requires a massive amount of time and resources to handle on your own. Your time is better spent on core operational tasks that help your company grow.
How much do payroll services cost for small businesses?
We view pricing as falling into two categories:
Tech Costs
Your tech costs can vary greatly. We use Gusto extensively with our clients because it’s a platform that we and our clients truly love using, and you can view their tech prices in-depth here. But general pricing is:
- Simple: $40/mo + $6/mo per person
- Plus: $80/mo + $12/mo per person
If you believe that you’ll need additional support or access to HR resources, Gusto will provide this for an additional $8/mo per person on your payroll.
Gusto provides a variety of features, based on the tier chosen, which include:
- Payroll
- Employee profiles
- Onboarding tools
- Financial benefits
- Reports
- Time and project tracking
- Team management
- Performance reviews
- So much more
For larger entities that require greater scale, there is a premium option with exclusive pricing, but you need to work with Gusto directly on this. The sales team will ask you a series of questions and provide you with an estimate of how much your service will be.
Professional Costs
As far as tech costs go, you’re charged based on the pricing structure of Gusto. In addition to your tech fee, there is a fee for the actual payroll processing. We cater our services to your needs, and without knowing about your business’s requirements or size, we cannot provide an accurate cost estimate. We’ll handle the ins and outs of your payroll, ensuring that no errors or delays lead to unhappy employees banging on HR’s door.
If you’re interested in our payroll services or how we can help you with your payroll needs, schedule a consultation now!
