One headache that comes with hiring a new employee is payroll. Doing the paperwork and filing payroll taxes can be overwhelming: FUTA, SUTA, FICA, it all starts to look like alphabet soup after a while.
Whether you like it or not, it has to be done every week or two for as long as you have any employees.
Even if you’re incorporated and you are the only employee of your corporation, having a payroll service can make keeping accurate records and paying your payroll taxes on time a lot less work. I chose to use a payroll service for my company only after I had my first employee and the government slapped me with a penalty for a miscalculation/missed deadline that cost me close to a year’s payroll service fees.
A payroll service can make the paperwork and deadline nightmares a lot easier. You can fax in your employee hours every period, report them online or arrange to get a call from the service so you don’t forget.
They’ll do the rest-calculate wages, overtime, bonuses and deductions, pay the appropriate government agencies, deal with garnishments and, if you want, deliver checks to your door complete with documentation for your accountant or bookkeeper.
Most will even deduct their payroll taxes and their fees directly from your checking account so you don’t have to worry about writing and mailing a check.
Many services will also pay the penalty if they make a miscalculation (ask for confirmation in writing). They’ll even prepare end-of-year reports and W2s for your employees.
Fees vary, but generally the barebones service runs about $35 a pay period plus a buck or two per check. Quarterly and end-of-year reports and paperwork are usually an extra cost.
Here are some of the best-known payroll services:
• ADP Payroll Services – www.adp.com
• Corporate Payroll Services – www.corpay.com
• Paychex – www.paychex.com
Another option, if you’re comfortable with a computer, is online payroll solutions. The best-known online service is from Intuit, the maker of Quicken and Quickbooks, (Intuit Online Payroll – www.payroll.intuit.com.)