Whether you have 100 employees or only a handful, there’s no denying that processing payroll takes a lot of time that you could devote to increasing business revenue. Instead, you’re spending time completing a necessary task – but one that isn’t billable. Perhaps you are considering outsourcing payroll, but feel uncertain as to whether it would be a worthwhile investment. Below we discuss some factors to consider in the decision.
No Need to Hire a Regular Employee
You may try to do it all as a business owner, but the reality is that you simply don’t have enough time and you must delegate at least some of your tasks. Payroll is often a task that gets delegated. If you decide to hire a full-time employee to process payroll, you will need to pay his or her salary even during slow periods. You also need to consider the added cost of benefits such as health insurance and vacation time. Even hiring a part-time employee could end up costing more than you expect.
When you outsource payroll, you only pay for the services you need. That means no more paying for benefits or idle time. Best of all, you can choose the services you need as a small business owner and then add what you need as your company continues to grow.
Avoid Costly Calculation Errors
As an employer, it’s up to you to determine and withhold the proper amounts for federal income tax, social security, medicare, and state income tax. This can become complicated in a hurry. For federal deductions, you must refer to the W-4 each employee filled out at the time of hire. However, employees can change this form at any time, and you will need to adjust deductions accordingly.
The federal government also requires the withholding of social security tax at 7.65 percent for each employee, while you as the employer must withhold an equal amount. You also need to monitor high-earning employees to ensure that you don’t withhold more than the amount capped by the Internal Revenue Service (IRS). Unfortunately, neither the IRS or state governments are very forgiving with calculation errors and late payments. The best way to avoid these problems is to outsource payroll to a company like Chicagoland CPAs with experts on staff who focus on only one task at a time.
You Won’t Have to Track Tax Payment Deadlines
Being a business owner means paying many different taxes. These include federal tax, state tax, social security, medicare, unemployment insurance, and workers’ compensation at a minimum. Tracking all these deadlines can be intimidating, especially when you’re busy running your business. Another benefit of outsourcing payroll is that you don’t even have to think about it.
These are just three of many benefits you can realize when you decide to outsource payroll. We invite you to contact Chicagoland CPAs today to learn more about how we can help add more time back into your day.
