When it comes to payroll services, organizations can hire payroll companies to handle the process of paying their employees accurately for their work and on time. The standard type of payroll services most companies offer can collect employee information such as the number of hours worked and the total amount of wages due. This information, once collected can be used to calculate an employee’s gross wages, withholdings and deductions.
After which, the payroll service can go ahead and either print cheques or make direct deposits. Most organizations turn over all payroll related tasks to payroll companies as they can also meticulously prepare the employment tax filings, when required. These include forms such as 1099 and W-2, which is now mandated to be filed and submitted by all employees each year to the Internal Revenue Service (IRS).
The best payroll services come with many additional and useful features. This includes the ability to handle specific HR related tasks of the organization such as monitoring and administering the organization’s retirement accounts and employee benefits program. The new hire process can also be integrated into a good payroll service as well as an updated compliance list that can scan employee documents to ensure that all procedures and IRS guidelines are met.
What are the Benefits of Using a Payroll Service?
Employees also have advantages when it comes to implementing a payroll service in an organization. With the increasing pace of modern technology and access to the internet, employees can now instantly log on and check individual information relating to their upcoming paychecks, the amount that is being withheld (for tax purposes), their leave balances, payment histories and other financial reports. All this information is updated in real time and if required, the employee can update certain personal details.
The main advantage for the employer and business owner is that the payroll services can help lessen the overall burden of specific tasks which in turn, will allow them to focus on other aspects and operations of the business. However, depending on the size of the organization and the number of employees, a good payroll service can quickly get expensive as the more and more services are integrated into the payroll system.
When it comes to the expenditure of payroll services, there are several factors that need to be considered such as the number of pay periods each month, number of salaried and wage employees, the comprehensive services the organization would like to integrate, etc. Generally, payroll services are priced based on the calculations per employee and per cheque.
What is a Payroll Software and What is it Used For?
A payroll software is needed as it can effectively run the various payroll management tasks on behalf of the organization. The benefit of using a simple payroll software is that it requires a minute input from the employer, this pertains to details such as the wage information of employees and their working hours.
The payroll software is what does the heavy lifting as it can handle all the necessary calculations that are required by the IRS such as the withholding amount for each employee. The software will periodically receive automatic updates from time to time to ensure that it is up to date with all the tax laws as well as fill out these employment tax forms on behalf of the organization.
The employer can customize the payroll software to add any optional deductions and withholdings for each payment if required. Once the changes are saved in the settings tab of the software, it will automatically calculate the withholding amount for every cheque. However, keep in mind that if you are an employer who is currently looking for a payroll software that can meticulously handle the cumbersome calculating tasks of your organization, you will still be required to manually enter the details as well as physically print and deliver the cheques.
The employer’s signature is still required on each cheque and also on certain employment tax forms. The software will prepare and file them for you but that’s where the automation process ends. Even so, by using a payroll software, the employer would still save a relatively large amount of time as the software makes the handling of complicated withholdings and ever changing tax laws much easier.
An advanced payroll software also comes with extra features such as the ability to login from any web enabled computer to access employee details. Intuit online payroll is an add-on for payroll softwares that allows employers to manage payroll processes on the go. This way employers can handle any important payroll duties as well as make free direct deposits and e-payments for state and federal tax forms. These additional features also include an option for you to receive reminder emails before tax filing season approaches or when deadlines are just around the corner.
When shopping for a payroll software, remember that the price will be competitive as the software comes with various features that are not available on a standard payroll service. If you're looking for a comprehensive software (full service tax preparation), it may cost you around $80 a month for 10 employees. If you need something less expensive, consider a web based simple payroll software that starts at $10 a month and can be customized depending on the number of employees you wish to add and for how many pay periods.