For a small business owner, processing payroll can be a complicated and time-consuming task. This is true whether you have five employees or fifty. Since payroll functions can include anything from determining employee wages and withholding taxes to updating the vacation and sick pay and deducting employee contributed payments for benefits or retirement plans, using a payroll service will minimize the risks of costly errors.
With a payroll service, you simply have to provide the hours, salary rate and types of deductions for your employees. Many companies provide a secure web based updating service for this task. The firm will then process the checks or direct deposits to the employees and make the necessary deposits into Social Security, Medicare, Federal and State Withholding and Unemployment tax accounts.
As noted above, payroll services will generally include payroll tax responsibilities as part of their service. This includes more than calculating the taxes and making those deposits. They also prepare and file all necessary quarterly and annual reports. Filing reports on time and keeping payments up to date reduces the risk of penalties and fines for payroll tax violations. Most importantly, a payroll tax service will keep up with changing local, state and federal laws to ensure compliance at all times.
An outside service will make it much easier for a business owner to maintain a budgeting and cash flow planning. Reports will be provided each time a payroll is processed that will provide information on how many employees are participating in the various benefit and retirement plans you might offer. This allows you to project you own costs to maintain those policies and programs. Also, when tax liabilities are calculated and set aside regularly, you ensure that you won’t miss any critical payments and can always anticipate what your cash availability is for major business development plans.
Roberts Tax Advisory provides professional accounting, payroll tax, strategic planning and many other financial services for small businesses. Contact us today for more information.