Hiring the right payroll service can not only help you avoid these costly mistakes, but it can save you money in the long run. According to several studies, every year, the IRS penalizes small businesses billions of dollars for payroll errors. In 2017 alone, more than 5 million employers nationwide were assessed over $7 billion in civil penalties. As a result, 82 million – 54 percent of the North American workforce – are affected by payroll problems. That’s critical considering that nearly half of workers say they’d launch a new job search after just two negative issues with their paycheck.
Hiring a payroll service will keep you from misclassifying employees.
Incorrectly classified employees, primarily those erroneously treated as independent contractors, often miss out on the benefits and protections they’re entitled to by law. A top result is that employers fail to withhold and pay necessary taxes. This common error leaves a business subject to paying both its share and the employee’s share of taxes plus penalties, interest and back wages, as well as vulnerable to litigation. A dedicated payroll team will monitor the way employees are classified, ensuring that all forms are filled out correctly and turned in on time.
Hiring a payroll service will help you keep accurate payroll records.
Keeping accurate records can be a real hassle. In addition, the storage of these records so that they are readily accessible when needed can present challenges to any small business owner. Federal and state laws, as well as industry-specific standards, mandate that employers store certain information for specified amounts of time. Failure to do so can bring on a range of troubles from tax audits and penalties to criminal charges in the most severe cases. We have developed a payroll processing system that carefully monitors and maintains these records so that you can spend your time on more critical tasks like fine-tuning your business methods.
Hiring a payroll service prevents missing tax payments and filing deadlines.
Most employers withhold the correct amount of state and federal taxes. However, they’re also required to report and pay them by specific deadlines throughout the year. Many entrepreneurs with new or smaller businesses are unaware of the full requirements and deadlines, or that late payments can result in costly penalties. The cost of hiring a payroll service is usually offset by the savings that you realize by not making these expensive mistakes.
These common mistakes and the potentially devastating consequences bear out plenty of reasons for employers (particularly small and medium-sized businesses) to outsource their payroll tasks. Payroll mistakes occur twice as often when employers attempt to tackle it in-house compared to third-party solutions – 11.4 percent vs. 6.1 percent, respectively. Not only do error rates improve with outsourcing payroll, but statistics show it can save companies an average of 18 percent.
Tackling the payroll needs of your small business on your own, can often be complicated and, if not done correctly, costly. At Payroll Complete, we use the latest technology and the vast knowledge of our expert payroll staff to partner with you and guide you through the challenges you may face.
We know that your payroll needs are unique. That’s why we take the time to understand your needs and tailor a plan designed to maximize your payroll efficiency. We are a rock-solid, reliable company committed to outstanding customer service.
Let our expert payroll team handle the details, so you are free to focus on other areas of your growing business. To find out how we can help you ease the pain of the payroll process, click here to schedule a free consultation.
This article was adapted from an article originally published by Apex HCM.