Learn about online payroll services and their advantages.
Online payroll services do the time-intensive, necessary and error-prone work of managing employee pay for companies. Completing payroll work doesn't generate income or help a company grow, and payroll mistakes can result in tax penalties or loss of workers. Businesses may choose to use cost-effective online payroll services to simplify the process.
There are three main tasks that online payroll services handle: generating the payroll, paying taxes and filling forms. They complete all the calculations that compute employees' gross pay, taxes, withholding and net pay. They calculate the taxes a business owes and pay them to the correct government agency. They fill out and submit the proper forms reporting tax liabilities.
Perquest is an online payroll service that performs many payroll-related functions for businesses. They provide 24/7 Web access, make payroll processing more efficient, cut and distribute checks electronically, calculate and pay withholding and employment taxes, handle all tax documents, report newly hired employees, prepare and distribute W-2s and 1099 MISC forms and provide employees with direct access to their personal pay information. They guarantee the payroll will be done correctly and on time.
PayCycle is another online payroll service, but it works a little differently. PayCycle offers on-demand payroll services and a Do-It-With-You program that guides users through the entire payroll process online. PayCycle is specifically geared toward small businesses of 1-50 employees and handles all payroll and tax information. There are different levels of client access, depending on what a business needs, and each level comes with a different cost.
Automated Data Processing Inc., or ADP, is a comprehensive online payroll service with options for bundles or à la carte selections. They handle all human resources and benefits needs, including retirement accounts, health benefits and life insurance benefits. ADP offers multiple ways to input payroll data to please different work styles: call in and talk to a representative, use the Internet or use a standalone personal computer. Also, while many online payroll services directly deposit money into employees' accounts, ADP offers the option of mailing out professionally printed checks.
Bank of America offers online payroll services for small companies. They guarantee 100 percent accuracy, instantly calculate withholdings, send payday e-mail reminders, track vacation and sick days, offer direct deposit, allow professional paycheck printing from a home or business computer and provide employees with online viewing access. However, a Bank of America business checking account is required.
There are many advantages to using an online payroll service, including staff time savings, accuracy, speed, minimal need for input, easy reporting, no manual calculating, easy tax payments, reminders, employee access and integration.
Business owners who switch from manual payroll to an online payroll service can initiate the next week's payroll in a few minutes. Initial setup will take a while, but after that employers merely have to input the employee's hours, any overtime and any vacation time or bonuses. The online payroll service does the rest.
Using an online payroll service saves time that business owners can commit to their work without the worry of calculating complex payrolls and taxes. No manual calculating is required. As long as setup is done correctly and worked hours are properly input, the results are guaranteed to be accurate. A reliable online payroll service will pay for any tax preparation or reporting mistakes it might make.
Online payroll services also offer reports on topics such as workers compensation and tax liability and offer reminders about tax deadlines so business owners are always informed and up to date. For the business convenience, payroll services also export payroll data to small business accounting software to integrate payroll information with the rest of a business' finances.
Another helpful feature is employee access to their pay information on the online payroll service Web site with a unique username and password. This allows employees to track their pay, view their benefits and find answers to their pay-related questions.
Before an online payroll service can take the burden off a company's shoulders, information must be put into the new system. This includes company pay policies; company tax identification numbers; a list of employees, along with their contact information; direct deposit information; payroll information such as taxes, withholding and benefits for each employee; and company pay policies.
The setup process is eased by setup wizards that lead business owners through the process. Helpful technical support is available if needed.
When choosing an online payroll service, choose one with experience working for specific business types, such as large or small companies, that offers a written guarantee against tax mistakes. Choosing a national company may also be wise for companies with employees in locations across the country. Being aware of tax laws in different states may be important.
Consider the number and breadth of services provided and the level of customer support offered. A company that would like to add accounting work or 401(k) management to the bill should look for an online payroll service that provides these and more. It is important to work with a company that can respond promptly to any payday issues.
There are dozens of online payroll services, and with a little research, a company is sure to find one that meets its individual needs and budget. The time saved can be used to work and promote the business and will add comfort knowing one's taxes will be handled properly and in a timely manner.