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Download this guide to learn whether in-house HR support or sharing the workload with an HR partner is the right fit for you.
Starting and growing your own business is one of the most rewarding things you can do. But one thing you probably didn’t sign up for when you began your company is all the administrative work that comes with it — namely, payroll. As a result, payroll services for small businesses are a logical step to grow.
You might be thinking you can handle payroll by yourself, but why should you? You have better ways to spend your time! Administrative tasks, like payroll, get in the way of managing your cash flow, employees, and growing your company. On average, small businesses spend well over 40 hours a year on payroll and tax preparation — that’s a week-long vacation.
If you’re hiring more employees, now might be the time to think about payroll services. After all, handing your payroll off is usually a sign of growth. There are a lot of payroll services and payroll companies to consider, but regardless of what service you choose, here are some of the benefits you can expect.
The first benefit of payroll services for small businesses is the reduction of risk to their business. Small business owners may not be aware of all they have to comply with for payroll. So using an expert, for this reason, makes sense.
For example, payroll processes are subject to many federal, state, and even local laws. The Fair Labor Standards Act (FSLA), Federal Insurance Contributions Act (FICA), Federal Unemployment Tax Act (FUTA), and Equal Pay Act (EPA) are just some of the complex laws that every employer has to contend with.
The most common payroll mistakes that small businesses make are not paying their employees on time, misclassifying workers, and not being compliant with federal and state wage and hour lours. Just the simplest mistake in payroll could lead to steep penalties.
A payroll services company takes on the legal burden of managing payroll for small businesses. Payroll companies know how to process payroll in a way that is legally compliant and meets tax requirements. And if you can find a local payroll company, they’ll have a better understanding of state wage and hour laws.
As mentioned, payroll and the tax preparation that comes with it can take up a lot of time. Just think of everything that goes into managing payroll:
Not only does actively processing payroll take time, but so does learning all the laws and regulations that come with it. Then if a mistake does happen it can take additional hours to go back and correct it.
Many payroll service companies have a platform that automates the payroll process and is accessible to your employees — saving them time as well. With a payroll platform, your employees can pull paystubs, manage their W-4 and direct deposits, and download W-2s at any time.
Another benefit of payroll services for small businesses is that as your business grows, your payroll costs usually decline. And many payroll companies know that as you grow your business, the complexities grow with it. The best payroll service companies also support:
There’s a lot that goes into paying your employees — from figuring out what to pay them to how to pay them. Payroll services for small businesses can help. Obsidian HR’s payroll specialists manage all your payroll activities in one convenient platform — protecting your business and removing the burden of payroll.
To learn more about our payroll services, and other benefits to outsourcing your HR, download our guide below.