I see plenty of room for improvement is small business payroll processing. About 2 in 5 of all small businesses eventually wind up with problems and penalties due to payroll tax errors. The issue can usually be avoided by ensuring that service is provided by a reputable payroll service that is supervised by a responsible person. Problems and penalties occur when there is a technical error that is not promptly addressed. A combination of strong technology plus professional oversight is a combination that gives best results.
Do-it-yourself payroll services start at about $50 per month but I strongly recommend professionally managed services at $75 per month for small businesses. This ensures a problem-free experience and access to experienced help if necessary to address any questions. When issues do arise, they will be handled without a requirement of additional time spent the business owner.
A few tips that can improv service and lower cost:
- Use the payroll service to pay unincorporated subcontractors to satisfy the requirement to provide a Form 1099.
- Pay employees and subcontractors though electronic deposit and not a physical paper check.
- Allow employees and subcontractors to have online access to their own payroll account. The allows them to access information anytime, download reports and form and get answers to payroll-related questions. This service is offered by all major payroll services at no extra charge.
- Allow your payroll system to connect to voluntary employee benefit plans. This saves taxes for both the employee and the employer. Tax-free flexible benefit plans are especially popular with employees and a lot easier to set up than you might imagine.
- Use remote online services that offer the best match to your needs. There is no advantage to using a local service provider because almost all payroll service is provided by phone or online.
I will be pleased to discuss a custom solution to your business payroll.
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