In the USA it is mandatory for employers to pay for Medicare, Local, State and Federal Taxes for their employees. In the process the employer deducts a portion of taxes and fees from the employee paychecks. Needless to say all these transactions are recorded for audit and reporting purposes.
Payroll Services – What does this entails
A payroll services company does all these activities for a fee, so that the business owners can use their time for other business activities. Once a contract is signed between the business owner and payroll service company all that the business owner has to do is to provide the service company with list of employees, hours that they worked and adjustments therein. The payroll services company then processes this data, does a fund transfer from the employer account to the payroll service account and disburses the salaries either through standard checks or direct bank deposit. The same is intimated to the employer through payroll and tax reports.
In addition to the standard payroll management services offered, payroll service companies like CheckMark, Inc. offers additional services such as benefit administration, retirement services, vacation and time-off calculations etc. The spectrum of services offered encompasses tax payments, labor management, tax compliance etc. The fee charged for handling these tasks depends of the account size which normally revolves around the no. of people on the payroll list.
Payroll Services – Evolution and Ticking
Many companies big and small have laid the baseline format for the payroll service industry operations and the field seems to be still evolving with the advent of new technology and working methods. Today a signed-in employer can enter his payroll information into the services portal and get the transaction done within minutes. At any point in time the employer can view their records with click of a button and also update the same at run-time. Reporting is fast, accurate and saves the employer from IRS penalties.
Payroll Services Company – How to Choose
Of course it is also true that there have been instances of fund theft and misappropriation due to computerization. It is still recommended to research for the various options available in terms of the payroll services companies, their work practices, reputation and customer testimony. Care has to be taken as the signed-up payroll service company will have access to the most confidential records of the employer. Also, if payroll Service Company fails to file for taxes on time, the signed-up employer’s company will be held responsible and will be liable for prosecution and monetary penalties. All that said, the signing up of a payroll service company has long list of benefits which cannot be overruled viz: more time for the employer to focus on main business activities, don’t have to hire a full-time accountant for payroll purposes, gets his payroll work done as per the best practices in the industry etc – to name a few.