When Is It Time to Hire a Payroll Service?
When Is It Time to Hire a Payroll Service?
Even if you only have a small business with a few employees you might be considering outsourcing the payroll duties. However, maybe you’re not exactly sure how a payroll service can benefit your company. Here are some things to consider when you’re looking to hire a payroll service.
Withholdings are tricky.
Calculating the amount of money to withhold from employees’ paychecks can be tricky. Here are just a few of the common withholdings:
- Withholdings for states with local income tax using a W-4.
- Withholdings for FICA taxes at a current rate of 7.65%. It’s also important to note there is a cap on Social Security Tax for highly paid employees.
- Withholdings for federal income tax based on employees W-4.
It’s cheaper.
If you are only paying a few employees it’s easy enough calculate their pay by multiplying hours worked times the pay rate. However, if you are a business that produces a product, you’ll want to know the cost of labor required to produce the product. That way you can determine how much to charge the customer. Many times the easiest way to accomplish this is to hire a payroll service with the systems in place to easily find this information.
You won’t miss deadlines.
Paying and reporting payroll taxes by the state and federal deadlines can be difficult. And missing deadlines for paying or reporting can cost your business steep fines. Therefore it might make sense hire payroll and let them worry about making these deadlines so you can remain focused on other business needs.
Don’t worry about tax requirements for multiple state and local municipalities.
If you have employees or associates that do business in multiple states you must comply with those state requirements for reporting and paying state income taxes. Additionally, individual cities can often have income tax laws that apply when doing business within their city limits.
If you have any questions about how hiring a payroll service can benefit your business contact the professionals at USA Tax Prep Plus today!
