Processing employee payroll might sound like one of the most routine aspects of running a small business, but there is more to it than just cutting cheques. It is a crucial core business function and it be costly if you make a mistake. Tackling all of the necessary responsibilities for payroll — from totaling hours and performing gross-to-net calculations for each employee to working out and processing payroll taxes and filing tax returns — is a significant burden to the business owner and one of the core reasons why more and more small business owners are opting to outsource this critical function.
Outsourced payroll solutions that address payroll, HR services, and employee benefits through a dedicated company can take much of the stress and hassle out of this process and can yield financial and other benefits, especially for those small businesses with fewer than 50 employees. It will also reduce headaches during tax season. Such systems are also often integrated with compliance solutions such as OSHA.
In addition, payroll outsourcing can also provide access to experts who can offer support and advice on sensitive employment issues. More than 85% of certified public accountants recommend that all small businesses outsource their payroll to professional payroll solution providers. Small businesses should look for those solutions providers who also offer automation and self-service tools like online portals or telephone services.
Companies with more complex set-ups should investigate what outsourced payroll can offer. Small businesses that have expanded into other countries will have different needs to those based solely in the U.S. For those with cross-border employees in Canada, for example, the benefits can be significant, as outsourced payroll providers are better versed in very different laws and regulations. Given that Canada has identified small businesses as one of the greatest areas for uncollected taxes and targeted those businesses for collection, such assistance can be hugely beneficial. Canada’s more than 190 regulatory legislative requirements in terms of employee payroll can make small businesses wary of expanding into the country, but with outsourced solutions that burden is mostly lifted.
Choosing to outsource employee payroll is about increasing efficiency, lowering the burden on the business owners and reaping the benefits of the cost and time savings that such solutions can offer.