Doing Payroll Yourself vs. Using an Online Payroll Service Provider
LAST UPDATED: June 11, 2022
Payroll is arguably one of the most important aspects of running a business. When done well, it can help to improve employee morale and retention, while also saving the company money. However, when payroll is done poorly, it can lead to errors that can be both costly and time-consuming to fix. With the right tools and processes in place, businesses can take control of their payroll and ensure that their employees are paid on time and accurately.
However, many businesses find themselves in the dark when it comes to payroll, relying on outdated methods or third-party providers that are more interested in their bottom line than your business's success.
How to do payroll yourself
Trying to do payroll yourself can be a daunting task and one that can quickly become overwhelming. Not only do you have to keep track of employee hours and salaries, but you also have to withhold taxes and other deductions. And if you're running your own business, you may not have the time or expertise to do all this yourself.
The benefit of doing payroll yourself is that you have complete control over the process and can tailor it to your specific needs. You'll also save money on payroll processing fees. However, there are a few things you need to keep in mind if you're going to do payroll yourself.
1. Keep accurate records of employee hours and salaries
When it comes to running a business, there are a lot of different moving parts. One of the most important aspects is making sure that your employees are paid accurately and on time. Payroll can be a complex and time-consuming process, but using a payroll Excel template or QuickBooks payroll can help to make things a lot simpler.
With a few clicks of the mouse, you can enter all of the relevant information and generate accurate paychecks for your employees. Plus, by keeping all of your payroll information in one central location, it will be easier to track and manage. So if you're looking for a way to streamline your payroll process, using a template is definitely worth considering.
2. Withhold taxes and other deductions
As a business owner, it's your responsibility to make sure your employees' taxes are withheld and submitted to the IRS on time. To do this, you must first collect W-4 forms from your employees. This step is important because it will help you understand how much each employee will owe in taxes. Factors such as their filing status, marital status, withholding allowances, 401(k) contributions, and insurance premiums will all impact how much they owe.
Once you have this information, you can then withhold the appropriate amount from each paycheck. And finally, be sure to submit the withheld taxes to the IRS on the schedule designated for your business; usually, this is monthly or semi-monthly. Always keep all documentation, like W-4 forms, pay stubs, and receipts of tax payments. You'll need these when it's time to file taxes.
By following these steps, you can ensure that your employees' taxes are paid on time and avoid any penalties or interest fees.
3. Pay your employees on time
Another important aspect of payroll is making sure your employees are paid on time. After all, nobody likes to be stiffed on their paycheck. To avoid any payment problems, it's important to have a clear and concise payroll schedule. This way, both you and your employees will know when to expect each paycheck.
Furthermore, you should also have a system in place for distributing paychecks. Some businesses choose to mail out checks, while others opt for direct deposit. Direct deposit is often the most convenient option, as it allows employees to receive their paycheck automatically into their bank account. Plus, it can help to reduce processing time and costs.
4. Use online payroll software
While you can do payroll yourself, it's often helpful to use payroll software. This type of program can automate many of the tasks involved in payroll, such as calculating employee hours and withholding taxes. Plus, it can help to ensure that your payroll is accurate and compliant with all applicable laws.
When choosing a payroll software program, be sure to consider your specific needs. For example, if you have a small business, you may not need all of the bells and whistles offered by more comprehensive programs. On the other hand, if you have a large business with complex payroll needs, it's important to choose a program that can handle everything.
What is a payroll provider?
Online payroll services have become increasingly popular in recent years, as they offer a convenient and hassle-free way to process payroll. A payroll service provider is a company that either assist with or assumes all aspects of payroll on behalf of another business.
This arrangement is often beneficial for employers who value their time and want to ensure that their employees and taxes are paid accurately and on schedule. In some cases, business owners may also save money when they consider that a payroll service provider can help them eliminate expensive tax penalties.
When choosing a payroll service provider, it is important to partner with a reputable and experienced company that offers a comprehensive suite of services. By entrusting this important task to a trusted partner, businesses can focus on what they do best and leave the details of payroll to the experts.
Best time to switch payroll providers
A lot of business owners think that the best time to switch payroll service providers is at the start of the year. However, this isn't always the case. In fact, there are a number of factors to consider when deciding when to make the switch. Perhaps the most important factor is whether or not you're happy with your current provider. If you're not, then it's probably time to start looking for a new one.
Here are a few things to keep in mind when choosing a payroll provider:
1. Consider your needs
The first step is to consider your specific needs. Do you have a small business with simple payroll needs? Or do you have a large business with complex payroll requirements? Knowing your needs will help you narrow down your options and choose a provider that's right for you.
2. Compare features and pricing
Once you know what you need, it's time to start comparing features and pricing. This is an important step, as you want to make sure you're getting the best value for your money. When comparing features, be sure to consider things like online access, direct deposit, payroll reports, and customer support.
As for pricing, be sure to get a quote from each provider you're considering. This will help you compare apples to apples and ensure you're getting the best deal.
3. Check for online reviews
One of the best ways to get an unbiased opinion of a payroll provider is to check online reviews. This can be done by searching for the provider's name on Google, Yelp, or another online review site. When reading reviews, be sure to pay attention to both the positive and negative ones. This will give you a well-rounded view of the provider and help you make an informed decision.
4. Get a referral
If you know someone who's happy with their payroll provider, ask for a referral. This is often the best way to find a reputable and trustworthy provider. A personal recommendation can go a long way in helping you find a provider that's right for you.
Making the switch to a new payroll provider can be a big decision. However, by following these tips, you can be sure you're making the best choice for your business.
What to look for in a new online payroll services provider
There's no one-size-fits-all solution when it comes to payroll. That's why it is important to find a payroll solution that is custom-built by specialists to have everything you will need for accuracy and speed.
When you're looking for an online payroll provider, it's important to find one that offers automatic state and federal tax filing, so you can be confident that your payroll tax will always be up to date. You should also look for a provider that offers easy-to-read reports so that you can track your payroll tax and gross pay for each pay period.
Finally, make sure the provider you choose offers benefits and special payments, such as sick pay, PTO, bonuses, and 401K contributions. With the best online payroll services solution on your side, you'll have everything you need to run your business smoothly and efficiently, so you can focus on what you do best.
The best time to switch payroll providers is when you feel like you're not getting the level of service or attention you need from your current provider. At Zeffry, we pride ourselves on offering superior customer service and support.
Our payroll services solution is designed by specialists to have everything a small business owner will need. With our easy-to-use interface, detailed reporting, and compliance tools, you can rest assured that your payroll is in good hands.
Taking advantage of our free 8-week trial will let you see for yourself that Zeffry is the best online payroll company for small businesses. Get started today and free yourself from the headaches of payroll.