Payroll isn’t getting any easier over the past few years. The global pandemic of 2020 brought about a shaky economy, as well as an endless number of regulations and rules that are related to programs that are essential, such as Paycheck Protection Program (PPPspan). Paycheck Protection Program (PPP ).
Payrolls are more complicated than ever.
While payroll management services are required more than ever however, not all are exactly the same. In this article, we’ll try take a look behind the curtain and reveal the real facts about payroll management services to help you decide whether or not the advantages are worth the cost. We’ll also give you a our top five list most popular payroll management services so that it’s easier to make an educated choice which is best for your company.
What Are Outsourced Payroll Management Services?
Before we proceed we must first address the question “What do outsourced payroll management services? Outsourced payroll management services can provide your company with efficient well-organized, efficient, and legally fully compliant payroll procedures. Instead of having to handle your payroll internally outsourcing payroll management service allows an external third party or partner company to serve as your company’s payroll department, freeing you to handle more important tasks for your company.
It’s crucial to point out it is important to note that ConnectPay is an outsourced payroll management solution. Our opinion could be biased. But, we have seen companies having trouble with payroll on a regular basis. This is why we believe payroll services are well worth the cost.
Let’s look at the advantages and benefits of outsourcing payroll management services.
What to look out for in Payroll services
Before you look into Payroll processing solutions, have to determine which features are most important for you. Here are some things to take into consideration:
- Features provided
Although most payroll companies provide comparable services certain circumstances, those services could become part of the price of the basic plan however in other instances they are offered for an additional charge.
HR features are advantageous to smaller companies without a dedicated HR however, do HR-related features come with the cost of the service or do you need to shell out extra money for them?
Some payroll providers provide a variety of plans, with certain features that are only available in more expensive plans. Be certain to keep this in your mind when searching for a payroll service.
- Ease of use
Small-scale business owners need to take on many roles and don’t always have the time or the desire to understand a complicated software program.
When purchasing a payroll program for your business, make sure the software is simple to use and is operational within a short time.
- Affordability
What do you think your company is able to spend? It is well-known that affordability is a subjective. While the majority of payroll services listed in this list are approximately the same price Some of the programs offer all features, whereas others provide a basic plan and the option to upgrade features for an extra cost.
One thing to bear at hand is although the base cost might be higher in certain applications, it could actually be cheaper when all options are part of the base cost.
- Access to management of benefits
If you provide benefits to employees, then you’ll want to have access to benefits management options. They could include basic benefit management, and access to low-cost health, life as well as disability plans.
Furthermore to that, if you already offer benefits like the group life insurance of more than $50,000 or individual use of your car as well as dependent care assistance or gym memberships You may have to consider adding the benefit as income that is imputed. Be sure that your payroll service has this option available.
Benefits of Payroll Management Services
There are many advantages to outsourcing payroll management to a service. It’s important to keep in mind that there are a few payroll management services that has all the advantages that we’ll mention here, however some of the advantages ConnectPay’s services can provide are:
- You don’t need any worries about taxes compliance or the payroll requirements.
- Payouts are made automated and directly deposited to employees.
- Workers’ compensation payments are integrated to allow you to pay for your expenses as you pay.
- You can reach experienced representatives whenever you require assistance.
- You can also get customized 3rd party pay reports.
- You can access resources to assist in managing your HR’s compliance.
- You can get back time to concentrate on managing your business, not managing the payroll.
We’ve learned that the value of outsourcing payroll management service can bring to your company is largely contingent on two factors:
- Do you pay for correct things?
- Are you receiving what you pay for?
What are you think the “right things” in payroll management include? Let’s examine some charges and charges that you must avoid using an outsourced payroll management service.
- Unnecessary Surcharges
One business, for instance that was charged an “next day” surcharge on each payroll, because they had to process their payroll on Thursday to ensure the Friday date for their check. This was a pattern that they repeated in order to avoid having to however, they were not told that they could change the date of the run earlier in the week to be able to avoid paying the surcharge.
- Unnecessary Services
Some payroll management services provide discounted employee onboarding services for an annual fee within the “bundle” deals. Small businesses typically don’t have continuous turnover of employees that means they do not require onboarding employees. However, a lot of businesses pay for this service.
- Unnecessary Expenses
In some instances, businesses have to pay excessively because their payroll provider isn’t trained in their field of operation. Compensation for workers is a prime where we see a lot of companies paying excessively. Every employee has a specific classification. are distinct classifications and certain workers’ compensation classifications are more costly than others. Some payroll firms may attempt to make it easy and categorize all employees alike, which nearly always results in overpaying.
Essential Elements of Payroll Management Services
The cost of paying for services and resources you don’t really need can be one of the worst things. Unsatisfying the services the price is a different.
If you contract outsourcing payroll management service You should be able to receive services as a payment for the service. It’s simple but it’s never as simple as that. There are a myriad of ways we find companies that don’t receive the services they pay for, and for the majority of these, it’s an enormous displeasure – and quite rightly!
Customer Support
Support from the customer might not be on your the first thing you think of when looking for an outsourcing payroll management however it should be. If something goes wrong, the quality of the customer service is the only thing that counts. Period.
These are stories from the real world:
- Certain payroll management companies provide support to other countries. We’ve had conversations with people who were unable to get a response on compliance issues due to the fact that the “support rep” wasn’t located in the US and was not knowledgeable about local laws.
- Prior to coming to us, one of our customers experienced a terrible encounter with their former payroll provider. After receiving a tax notification from the IRS and contacting the IRS to us for assistance. This tax notification was the result of an error made by of the payroll department however, when they sought for assistance they were transferred from one individual to another, but they never received assistance in resolving the problem.
- Small-sized businesses have reported to us that they’re experiencing delays of over 45 minutes every time they contact the payroll company they use.
- A frequent complaint that we hear about “big box’ payroll companies is that customer service phone numbers are answered every time by a different person and they are required to repeat every detail of the issue, even though they’ve talked for hours with an earlier representative.
We hear about these incidents frequently and that’s why we guarantee that our clients will never call their voicemails during office hours. We’ve embraced the “no voicemail rule,” and our clients are thrilled with it.
If there’s an urgent need, having the ability to dial and have your contact person on the phone immediately isn’t just important to have peace of mind, it can also help you resolve your issues faster so that you can return to working.
Our clients phone us at times when:
- Something is not right in the employee’s payroll
- There’s an tax issue that they need to solve
- Some urgent issue has occurred and they require advice
- They’ll need a mate (not necessarily however, but we’re here to help you in the event that you need one! )
Taxes and Payroll Done Right the First Time
Based on the IRS According to the IRS, over one-third of SMBs are subject to a tax on payroll penalty each year. The average penalty is greater than $800. If the payroll management outsourcing service is not up to scratch the chance of receiving an IRS tax penalty or notice of fee is high.
If you’re employing a professional to manage your payroll, it’s not necessary to worry about them performing the task incorrectly. Their errors shouldn’t be on your hands to fix and you should not engage in endless calls in order to get a tax warning or a penalty rescinded.
ConnectPay, for instance, offers ConnectPay for instance we provide our customers with no tax penalty or fee assurance.’ We are accountable for our payroll services. We also guarantee that should we commit an error, we are responsible for the penalty and cost for the error, not the client.
Local and Industry/Domain Knowledge
Two primary elements of great payroll support:
- Does the payroll company have knowledge of my region? Your area has its own laws and rules, and your payroll provider is not too far from it.
- Does the payroll service knows my industry? A good payroll service will be able to do the job of fully immersing themselves in all aspects required to meet the needs of your industry. Our customers can rest assured that we’re not only reachable and accessible, but also a member in specific industry associations, like for instance the Retailers Association of Massachusetts.
Relationships Over Databases
Large corporations have so many sites and organizations within them that their payroll functions are usually huge databases of companies working as a small unit to manage the payroll.
Smaller businesses, on contrary, require an entirely different type of service. They require to recognize the person they represent and establish an trust-based relationship with that person in the course of.
At ConnectPay we are a firm believer in relationships not call centers or databases. We establish relationships with our customers, however, we also establish relationships with our business partners.
For instance, if the client requires assistance or has a concern that is beyond our reach we can connect them with trustworthy CPAs and bookkeepers and others within their local community. Because we have established close connections with these companies we are confident that they will have the best interests of our customers in their minds.
5 Top-Valued Payroll Management Services
We’ve talked about some of the benefits and benefits of the payroll management service in general and in particular, but as we mentioned earlier in this article that not all payroll services are made equally. Let’s examine five payroll management options that we believe provide incredible value.
Rippling
Rippling provides a variety options for HR as well as compliance options including payroll. The solution from Rippling offers features such as time and PTO tracking as well as advanced reporting and advanced integrations with programs like QuickBooks, Xero, and other.Prices start at $8/month per user, however prices can vary based what services require to run your business.
Gusto
Gusto’s payroll system was designed so that it is highly automated and simple to use. Gusto provides features such as automated tax filing for payroll as well as compliance-checking for workers’ comp calculations, and many more.
Gusto offers a variety of packages on their site, however, for their base package prices start at $30 per month plus $6/month for each user.
ADP
ADP is among the largest companies in the outsourcing payroll management business. The solution offered by ADP offers self-service for employees, and advanced connections to HR software as well as ERPs. It is suitable for large enterprises and large corporations.
Pricing for ADP is only available on request, however they have four packages available starting with basic payroll and ending with HR Pro, which offers improved HR support, and payroll processing capabilities.
Wave Payroll
Wave Payroll is a solution for small to mid-sized enterprises that provides options to pay workers with W2 and 1099 Direct deposit options, and automated bookkeeping help. Wave also offers sophisticated reporting of payroll expenses.
The price for Wave Payroll is different by state, but it begins at $20/month and $6/month per worker or freelancer in states that offer self-service.
ConnectPay
ConnectPay concentrates on providing amazing payroll solutions for small-sized enterprises. We provide electronic pay stubs for employees, automated payments and compliance as well as mobile-friendly access that is seamless to time and attendance as well as many other features. In addition, ConnectPay serves as your partner in your efforts to grow your business by assigning an in-person Connected Service Rep to your account , who will help you with your payroll needs.
Our cost starts at $30 per pay period. Begin by speaking to an employee from our payroll department today to find out the ways we can help you alleviate all the payroll-related stress.
Choosing the Right Outsourced Payroll Management Service For Your Business
If you choose that you want to contract out your payroll with a service you should get the top service. But what’s “best” is subjective. What’s the best option for a small company for instance, might not be the best choice for a medium-sized enterprise in the same city.
We recommend that you test a range of payroll providers before making a final choice. Of course, we’d be delighted to offer us the chance to earn your company as an outsourced payroll management company. But, we are aware that we’re not the right choice for every person.
Our specialization is small companies, and we strive to be the most reliable service to our customers. If you’re looking for that kind of service, and you’re a smaller firm, don’t be afraid to contact us.
We’d be delighted to speak with you!
If you’re looking for some more details on our payroll process I suggest you look through our website, The connected guide to payroll.
What Is Payroll?
Payroll is the total amount a business provides employees for their work. Payroll is also the method of computing the net pay of employees and establishing payment to them. No matter if you have one employee and 100 or more, it is essential to have to manage payroll in order to ensure they are paid in a timely manner and that the correct documents are maintained.
Payroll Processing Stages
Payroll is a process that has many steps that begin prior to the employee’s day of employment. The most basic steps are:
- Determine the Pay cycle. This is the time frame at which you pay your employees. Most employers will choose weekly, biweekly or monthly cycle for payments.
- Gather information about employees along with tax-related documents. The documents you collect include the W-4 form as well as the state tax withholding forms, as well as information on your bank account.
- Find gross wages. Gross pay is the amount that employees are owed before tax.
- Find out the net pay. Taxes will be withheld (and others deductions) from the pay, and the employees will be paid the net amount.
- Start the payment process. If you’re managing the payroll yourself, cut the checks and mail them with pay stubs. If you’re paying by Direct Deposit, then you’ll need to initiate an account transfer. In the event that your employee’s payroll is administered by a payroll provider like Gusto Gusto will start the payment according to a predetermined period of billing.
- Make sure you pay taxes and keep documents of payments. Finally, you’ll be paying the state and federal taxes due and keep track of all taxes and payroll.
How To Process Payroll
There are three methods to process payroll. Payroll can be processed manually, outsource it , or employ a payroll service platform.
Manually processing payroll requires Microsoft Excel or other software to determine the amount of tax owed and the amount of tax to be withheld from employees. This can work if there are only a handful of people working, but this could generally take longer and can increase the likelihood of errors. Because of the time-consuming nature of the process can be and how complex, many businesses opt to outsource the process or employ an online payroll system.
Platforms like Gusto and Wave will gather all of the necessary information for you to calculate the tax withholdings you need and then make the direct payments to employees. Employing payroll systems such as they can be a quick and cost-effective method of taking this burden off your shoulders especially for small companies who do not wish to outsource this task.
How Does A Payroll Service Work?
While each comes with a distinct design and features, all online payroll solutions function the same method. They usually offer an online portal that is accessible to workers and employers. Employers, or your bookkeeper, accountant, or HR worker–set up benefits and salary for employees, as well as, on certain platforms, contractors.
When you employ an employee who is new to the company you can invite them to join self-onboarding through the employee portal which means you can easily collect their W-4 form or W-9 form along with their contact information as well as sign to receive the benefits they need.
Certain payroll companies provide automated payroll. This means that you can control worker pay, and let employees track their hours (if needed) and the service can run payroll on a regular basis. They allow employees to enter direct deposit details, and they can connect a company bank account at the employer end, so that payroll is completed without printing or deliver the checks.
If your payroll system isn’t automated then you must manually process it two days prior to payday, entering employee pay amounts and making paydays.
Many payroll platforms online have options to manage benefits on the same system along with integrations to accounting software. Some offer employees the chance to purchase a credit card so that they can get money prior to payday and then use the card to buy items.
Certain Payroll services make up a part and parcel of the larger HR platforms, which include not just benefits and pay as well as educational, employee growth,, and coaching programs.
How To Use a Payroll Service
The way your employees use an online payroll system will differ dependent on how big your staff and the experience of your employees, and the payroll system you are using. The majority of payroll services have excellent customer service and sales representatives who will help you establish the system and answer questions during the process.
A basic payroll system allows you to pay employees and, on certain platforms contractors. Utilize it to make direct deposit and to handle tax and payroll checks, as well as reports.
A majority of payroll solutions provide benefits administration, which means you can make use of the platform to manage paid time off pension plans, retirement plans, insurance, and other benefits to employees. It is also possible to incorporate benefits into payroll.
How To Choose A Payroll Service
The most reliable payroll services provide the following benefits:
- Direct deposit payments
- Tax filing for payroll and tax filing for payments
- Self-service for employees and self-onboarding
- Integration with QuickBooks and any other accounting software
- Basic reports
- Automatic updates for compliance
Without these functions, payroll software don’t provide much that you could not perform manually using the spreadsheet.
To better understand your payroll needs, consider these ten questions regarding your company and its pay system.
What Is the Size of My Business?
When you think about outsourcing payroll, you don’t have to consider how big your company by its volume of turnover or the number of customers. It is important to think about two aspects the number of employees you currently have? And what number will you be adding in the next one to two years?
What Types Of Employees Do I Have?
There is the option of having both regular employees as well as freelance contractors working on your payroll. In addition, you could offer your employees each month a fixed amount either hourly or the base wage with tips or commissions.
The tax structure and structure of payments for each one are different and you must understand these numbers to determine your payroll requirements. If you are a sole freelance contractors, you may be able to fulfill your requirements with an online payroll program, which can be cheaper.
How Do I Pay My Employees?
Do you require direct deposits or handle payments? Do you require international payments using platforms like Stripe as well as PayPal? Consider how you can transfer funds from your balance to the employees, and ensure that it is as simple as is possible.
How Often Do I Pay My Employees?
Are you paying all of your employees at once or do you have various schedules for different types of employees? In other words, you may be paying them biweekly or weekly. If you are dealing with independent contractors, you may pay them whenever they bill you.
A payroll program needs to be capable of handling these payments in addition to other off-cycle payouts such as bonuses, expense reimbursements commissions, etc.
Are All Employees Based Out of the Same Location?
If you employ employees in various states or across the world, you’ll have to comply with more rules. Since remote and hybrid work becoming more common due to the pandemic, it is important to think about whether you will have workers working from multiple places in the near future.
Who Is Responsible for Processing Payroll?
If there is a designated individual or group for processing payroll, you may be able to do it with an online payroll program that is less expensive. In the event that you don’t, you might want to look into an outsourcing payroll service, even if it’s more costly. This will guarantee that the payments are processed in a timely manner and in time.
What Are My Local/State Payroll Laws?
Payroll laws are contingent upon the state, locality and the countries in which your employees are located. It is important to know which local, state, federal , or international laws on payroll you have to follow. If you’re not certain you’re not sure, consult a payroll expert in your region to receive some advice.
How Do I Want Payroll Taxes Handled?
Payroll taxes can be complicated and time-consuming as your company expands. You must decide whether you’d like the latest payroll software to handle tax issues or not. If you’re sure then take a close look at the expense for the year-end calculation because it typically will come with an additional price fee. If not, be sure you hire a reputable tax professional to manage this task for you.
What Deductions Do I Need To Plan For?
Before you can distribute payments it is necessary to deduct tax deductions (income tax and social security tax etc. ) as well as the garnishment of wages (unpaid loans such as alimony, child care and so on.) and benefits (health insurance, etc. ).
What Is My Budget?
Cost is a crucial aspect when selecting the right payroll service. It is important to have a rough number in mind for the amount you can afford to pay either annually or monthly to meet the payroll requirements. This will make sure that you don’t go overboard when you’re tempted to add on extra features that are available.
Payroll Services Cost
Budget is a crucial factor in every purchase decision for businesses. Payroll companies typically provide monthly invoices, but it is important to consider the cost of a year too.
In addition to a fixed monthly fee Payroll services online typically cost per transaction or per employee payment. This means that the higher amount of workers more expensive the transaction fee. If you’re looking to increase your staff take a look at how the cost of your payroll will alter as you’re expanding. The majority of payroll companies have different payment structures to accommodate companies of various size. Find out which tier is the least costly for you over the long term before making a decision to sign up.
It is possible to go for paid add-ons in order to make sure that you have all “must have” features in your payroll system. Be aware of how much they will cost you. If you are able to squeeze in some “good to have” features too, then do it however, don’t go overboard.
In the end the costs, here are a few of the costs to examine before you make the final choice:
- Base subscription fee
- Setup & support fees
- Taxes and the cost of compliance
- Per-employee fees
- Add-on fees
Frequently Asked Questions (FAQs)
What are Payroll Services?
Payroll systems control and automate the payment of employees. They help businesses issue pay on time and keep in compliance with tax regulations.
Is there the top Payroll firm?
The ideal payroll provider for your business is determined by the size of your company and its requirements. The best payroll solutions for small-sized firms comprise OnPay, Gusto and ADP RUN. Traditional providers provide plans that are customizable that can be tailored to your requirements as well as platforms specifically designed to startups provide simple pricing and complete packages that you can be started in just a few minutes.
What are the features the payroll services for small-sized businesses include?
What features do you require in a service to pay your employees for small businesses include one that is easy to set up, that provides processing and administration of payroll and allows you to complete tax filing and creates comprehensive payroll reports, provides direct deposit to employees as well as the ability for employees to make changes when they need to, and provides high-quality customer service.
What kind of elements should HR in a pay system include?
Payroll systems need to be able to make onboarding and de-employment of employees, the monthly payment as well as off-cycle tax disbursement compliance simpler. This is due to factors such as employees having the ability to fill out W-4 forms electronically , and being able to access a self-service portal which lets them access all the necessary forms and to make any changes they require, and also view other documents such as pay statements. The most reliable payroll platforms provide HR assistance with health insurance plans, as well as other benefits. They also offer new hiring reports when required.
What is the best time to outsource your payroll?
The process of processing payroll can be very labor-intensive. outsourcing payroll can you to concentrate on your business. If you do not wish to outsource your payroll, you might consider making use of a software program to handle your employees’ payroll and tax payments.
What’s the distinction between cloud and on-prem payroll?
Cloud-based payroll systems are located on a service provider’s cloud, while an on-premises payroll system is installed on a server situated on the premises of the client. If you wish to control the entire process of your payroll system, you should choose on-prem payroll software. Cloud-based payroll software is less expensive than traditional on-premises software because it doesn’t require maintenance of any equipment.
Which are various Payroll cycles?
Most employers prefer biweekly, weekly or monthly cycle for payments based on preferences and compliance with the laws of the state. While hourly employees are generally paid biweekly or weekly however, monthly payments are more frequent for salaried employees.
