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Payroll Services Buyer's Guide - Services Offered

Payroll Services Buyer's Guide - Services Offered

Published: 04/10/2011

» HR | Insurance | Financial Services
»» Payroll Services

 

Services Offered

Payroll providers’ basic services include calculating paycheck and tax obligations for each employee, printing and delivering checks, and providing management reports. Paychecks can be issued on a weekly, bi‐weekly, monthly, semi‐monthly or yearly basis.

 

 

Additional payroll‐related services that may carry separate fees include automatic check signatures, direct deposit, and handling of W‐2s. Many services now offer tie‐ins with 401(k) and Section 125 mutual fund plans, allowing employees to set up automatic deductions from their paychecks.

 

 

For larger companies with more complex processing needs, some payroll providers offer HR software systems that track employee benefits information in addition to regular payroll data.

 

 

 

Filing taxes

 

Many payroll services offer the option of filing state and federal payroll taxes for your business. This can be a great feature given the fact that the Internal Revenue Service has reported that one out of every three employers has been charged for a payroll mistake, with total penalties reaching into the billions of dollars.

 

 

Typically, this payroll tax filing service is offered at little or no cost. This is because the provider will impound the tax due at the time paychecks are issued, earning interest on the funds until the money needs to be handed over to the government.

 

 

Just because another company handles the payroll tax filing does not mean you can stop worrying about making sure the filings are timely and correct. While most services assume responsibility for penalties resulting from incorrect filing, your company may be liable for any interest charges.

 

 

Keep in mind that many companies will not calculate local or city payroll taxes. Make sure to inquire about this if it is a significant issue for you.