Payroll is one of those tasks that every company must consider when hiring employees. Using an outside payroll service is usually cost-effective for any company, even for companies with only one or two employees.
By doing payroll in house, you must first have someone that is skilled in doing payroll since it includes setting up payroll taxes for individuals. You must also decide when your payroll is to be run (ie. biweekly, montly, etc) and follow that schedule. In addition, taxes must be set up accurately or your records will not match up with the IRS at year end, causing you to get the records straightened up at year end. What can happen from errors occurring is unplanned extra taxes due from the IRS. Also, if tax deposits (filings) are not made on monthly or quarterly deadlines, your company will be required to pay penalties and interest to the IRS. These penalties can be hefty, even if you make only a minor mistake.
By allowing a payroll servcies to do your payroll, you eliminate all of the uncertainties of deadlines and/or inaccurate tax set-up problems.
A payroll service will ensure that the payroll tax filings are done timely and accurately. In addition, a good payroll service will provide good reports for you to enter data easily, which will be a time saver when it comes to entering the information accurately. Some payroll servcies reports are confusing and hard to understand, causing errors in reporting.
A good payroll service to consider isADP found here: http://www.adp.com/solutions/employer-services/payroll.aspx. They provide timely, accurate filings, and easy to read reports. They also will file your state L&I (for WA state) for you, something that many payroll services don't do. They also prepare your federal unemployment report at year end, giving you a clean start to your next year payroll.
Copyright Jeanine Pfeiffer