What Factors Affect How Much Your Business Will Pay for Payroll Services?
There are many benefits to using a payroll service to handle your business payroll needs. The payroll company will issue the checks or do direct deposit for your employees while also taking out the appropriate amount for taxes, health insurance and other expenses. For small to mid-sized businesses, there is often not enough work involving payroll to justify hiring a full or part-time employee just to complete this task. However, you may not have the time or knowledge to complete these tasks on your own. Working with a payroll service allows your business to get the help it needs without having to hire someone full time. Before hiring a payroll service company, you will want to get quotes from a few companies. But, before you get quotes, you should out what factors affect how much you will pay for these services. This can help you understand why quotes may vary and what changes you may want to think about making to keep your expenses low.
The Number of Employees You Have
One of the factors that will affect how much your business will pay for payroll services is the number of employees that your business has. The more employees you have, the more paychecks your business cuts, which in turn means more work for the payroll service. The amount you pay is usually based on the average number of employees you have at any given time.
The Frequency With Which You Pay Your Employees
Another factor that affects how much you will pay for payroll services is how often you pay your employees. Someone who pays their employees on a weekly basis will spend more for this type of service than someone who pays their employees monthly. Once again, the company has to do more work if you pay your employees more frequently, which affects the price.
How You Deliver Your Paychecks
The method you select to deliver paychecks also affects your payroll service cost. Do you want all of the paychecks mailed to your company, where you will distribute them to the employees? If so, that will cost you less than sending the checks via overnight or certified mail to all of your employees.
The Complexity of Your Payroll Accounting Needs
The last factor that determines how much your business will pay for payroll services is the complexity of your payroll accounting needs. If you have salaried employees, it is easy to figure out how much they are owed each week, as their payroll amount doesn't change. However, if your employees work various hours each week, and that amount changes from week to week, adding in time sheets and figuring out pay can complicate matters. Likewise, a company that deducts health insurance, dental insurance, life insurance, and retirement from paychecks requires more work than a company that doesn't offer these benefits. The more complex and time consuming your payroll accounting needs are, the more you can expect to pay.