Your small business has many options to run payroll. You could run payroll yourself or you can outsource it. Outsourcing payroll to a payroll software can be a great benefit for your business.
What does it mean to outsource to online payroll software?
Online payroll software is a program you can use to run your payroll. Instead of hiring another person to run your payroll, or outsourcing payroll to a third-party payroll provider, you can do it yourself with the payroll program. The software runs in the cloud, so you just need a computer with an internet connection.
Because you are the one managing the software, you must enter all the necessary data. After that, the software will do all the payroll calculations for you, including gross wages, net wages, taxes, and other deductions. Because you are essentially outsourcing the payroll to the software company, you don’t have to do the calculations.
Payroll software companies often offer other payroll services so you can outsource more of your payroll. For example, you can use the company’s timekeeping software and tax filing services.
What can payroll software do for you?
When you outsource to payroll software, you can take many tasks off your hands. Below are some of the things payroll software can do for you:
- Paycheck printing
- Direct deposit payments
- Form W-2 creation and filing
- Gross and net pay calculations
- Tax withholding and contribution calculations
- Benefit deduction calculations
- Time off management
- Tax filing and depositing
- Employee portal software access
The benefits of outsourcing payroll
So why outsource payroll? There are many benefits of outsourcing payroll to software. Check out the benefits below to see why you should consider payroll outsourcing.
You increase your time
When you don’t have to do calculations by hand, manage payroll taxes, and constantly research the newest payroll numbers and news, you’ll free up some time. You can use the time you would normally use on payroll to build and grow your business.
You save money
It might seem cheaper to do payroll by hand, but it’s typically not. It’s easy to make mistakes when you do manual payroll. Payroll mistakes are costly. You can be hit by expensive penalties. When you use payroll software, the program does accurate calculations, files and deposits your taxes, and updates with the latest payroll rates. This helps you avoid any costly errors.
You use payroll experts
You might lack payroll expertise. You don’t have to worry about your inexperience when you use payroll software. The software company has payroll experts who work on the software’s development. They ensure that the software is accurate and meets your needs.
You stay up to date
Payroll rates and laws are constantly changing. It can be difficult to keep track of what is correct. Before you know it, you’re using the wrong tax rates. The payroll software company will do regular updates, so you never have to worry about running payroll incorrectly.
You remain secure
Payroll involves a lot of sensitive information, including pay rates and Social Security numbers. You must keep all this information safe. Payroll software stores your data on secure servers. This means you don’t have to worry about viruses or hackers. And because your payroll is behind a locked account, employees can’t easily walk off with information.
How much does it cost to outsource payroll?
The cost of outsourcing payroll varies a lot. Each payroll company has its own system for pricing. Your cost could range anywhere from a few to hundreds of dollars per month. Here are things that will affect your payroll outsourcing cost.
Number of employees: The number of employees you have on payroll will affect your payroll processing costs. The more employees you have, the more expensive your payroll will be to run. Some payroll companies, like Patriot Software, will charge you based on the number of employees you have and not on the number of payrolls you run. This is a good option if you want to run your payroll two or more times per month.
Number of payroll runs: The company might format their payroll pricing based on how many payrolls you run. For example, running payroll weekly will cost you more than running payroll semimonthly. If you need to run an extra payroll outside of your normal cycle, it might cost extra.
Tax filing services: Payroll tax services might cost extra. Often payroll companies have a basic payroll service that costs less and a tax filing service that costs more. Typically, the cost of the tax filing services is not much more, so the payroll services cost is worth it if you don’t want to handle tax deposits and filing yourself.
Extra features: Sometimes you need extra payroll features, such as time and attendance. These features come at an additional cost. Like the general payroll software, the cost of the extra features will depend on the payroll software.
Are you ready to outsource your payroll to an online software? Patriot Software is here to help. You can try our online payroll software for free. We have free setup and support, so it’s easy to get started. Start your trial today.
This article has been updated from its original publication date of September 15, 2017.This is not intended as legal advice; for more information, please click here.