Payroll Services Explained

For most, payday is the best day! Everyone works hard for their paycheck but many employees probably don’t think twice about how their paycheck ends up in their bank account or on their desk waiting to be cashed. As a business owner, paychecks and payroll services for your employees should be at the forefront of your mind. Having employees with accurate and timely paychecks makes for happier staff which benefits your business in the long run. By investing in your staff, your staff will invest more time and effort into their careers. 

What is Payroll Services?

Payroll services is crucial to ensure employees are accurately compensated for their work. Having a payroll service to handle your business payroll needs is very beneficial, as these services do so much more than just send out paychecks. Payroll services include but are not limited to:

  1. Payroll for weekly, bi-weekly, bi-monthly, or monthly compensation for staff. Processing payroll also includes calculations for incentives, commissions, or bonuses if applicable. 
  1. Processing payroll through a service is also less stressful when you have multiple types of employees to pay, for example, freelancers, part-timers, or full-time workers.
  2. Paystub information which shows payroll calculations such as hourly wages, salary wages, or overtime along with deductions like taxes, medical insurance, or retirement plan contributions will also be processed and available with each paycheck for the designated pay period. 
  1. Tax forms such as W-2s or 1099s are also prepared by your third party payroll service and mailed out to all employees by the deadline. Most payroll services offer these documents to be available online prior to the mail out date, offering extra convenience for employees. 
  2. Federal and state tax withholding information should be gathered when employees are first hired. Tax withholding information can also be updated through the payroll service if an employee wishes to change their  current elections.
  3. Retirement plan options are often offered through most payroll services. It is important to check with potential services for this add on option. By offering retirement plans or a 401k plan, you are investing in your employees and allowing quality team members to invest in their own futures.
  4. Time off or PTO balances can also be managed by a payroll service. Some companies offer a lump sum of PTO hours for the entire year while other companies allow employees to accrue vacation or sick hours based on how many hours they work each pay period. Having a payroll service will easily calculate and manage these time off balances. 

Importance of Payroll Services

One of the most obvious reasons that payroll services is important, is because timely and accurate pay for your employees is crucial to running the well oiled machine of your business. Employees are happier to come to work and perform a better job when they can confidently rely on their paycheck being provided at the given frequency (weekly, bi-weekly, etc). 

In addition to employees confidently relying on their paycheck, having payroll services often provides staff members with a convenient way to manage their pay information. Many payroll services provide a software or interface that allow employees to:

  1. Access their time clock or time sheet.
  2. View paystubs for accuracy prior to the pay date. 
  3. View and change tax elections.
  4. View remaining sick, PTO, or vacation balances.
  5. View year end tax forms and W-2s.
  6. Update annual benefits or make changes to benefits due to a specific life event.

Often, the systems described above are accessible from the workplace but also offer employees a login ID and password to access this information from home. By allowing at home access, you are giving your employees freedom to view and update their personal information whenever needed.

Choosing a Payroll Service

As a business, it is very important you choose the payroll service that best fits your company’s needs. In todays tech savvy world, there is payroll software options which provide you the cost effectiveness of doing payroll in house, and there is also a variety of third party payroll companies you can hire to manage the day to day payroll tasks. Although third party payroll services may cost more than using a software, they also offer more services and features. When deciding which option to go with, it is important to:

  1. Review the cost of a payroll service provider or software. If you choose to use software, depending on the size of your business, you may need to hire staff to manage the payroll process.
  2. Evaluate the user friendliness of the payroll service or software. It is also important to check on the customer support options for when assistance is needed. Customer support should be available for IT issues and general inquiries. 
  3. Know what services can be added on to your agreement such as 401k plans or medical/dental benefits.
  4. Understand the provided features of the service, for example, direct deposit options and time keeping systems.
  5. Be aware of being locked into a service for a contracted length or period. 

Because payroll services are so beneficial to your employees and business, it is important to really understand the ins and outs of the services offered. Finding a payroll service company that aligns with your company’s values and beliefs is a great way to start the search for your payroll servicer. 

Payroll services help to build rapport between a business and its employees. In order to have a successful business, the employees need to feel valued. One of the easiest ways to show staff their value is by giving them the confidence that they will be rewarded for their hard work with an accurate paycheck. By having a third party company assist you with payroll services, you can feel certain that your entire staff is getting the pay they earned, on time, all while providing them convenience and freedom. By investing in payroll services, you are ultimately investing in your employees and the future of your business!

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