PAYROLL PROCESSING SERVICES
Every company needs to process their payroll using optimized systems to stay in business
Payroll is one of the more important functions in a small business; after all, a seamless payroll process keeps workers happy and allows owners to focus on other areas of business instead of investing time in monotonous payroll procedures. Small businesses often struggle in this area, however. Often, weekly payroll is done manually, using formulas in an Excel spreadsheet. While it’s possible to accomplish payroll like this, Savvy & Suite would love to automate your payroll process, offering various payroll services.
We see it countless times: an owner pulls up the weekly spreadsheet and is forced to manually input hours. Out comes a group of numbers, from payroll taxes to net check paid. The owner then completes the weekly payroll process, writing a physical check to the employee that must be deposited or cashed in person. Isn’t there a better way to operate your employee payroll process? Why yes, yes there is. Savvy & Suite’s automated payroll process makes it easy on owners and offers employees the benefit of direct deposit, accelerating the entire process.
What is payroll tax? As all employees know, payroll taxes affect your net take home check, but do business owners understand the back end of the process? Payroll taxes are actually employment taxes; there are various forms of taxes associated with payroll, including Social Security, Medicare, federal and state unemployment, and federal and state income taxes. These taxes are either withheld directly from an employee’s paycheck and deposited with the employer’s portion of the tax or paid solely by the employer. These deposits are paid according to schedules that are dependent on the prior year payroll tax.
Another key question as it relates to payroll is how a person that works for your business should be classified. This can have significant impacts on your business and falls largely under the payroll department (alongside Human Resources, but that’s another matter). The two classifications of workers are either independent contractor or employee. While the actual payroll process itself may not be that dissimilar between the two classifications, the payroll compliance implications are significant. A number of tests can be administered to help determine the status of a worker, but because we have years of experience in this area, you may find it helpful to defer to our knowledge in worker classification. As mentioned, this can have an impact when it comes to payroll tax compliance, but also regarding other areas of your business, including benefits. There are specific compliance rules related to each classification of worker; it’s probably obvious that actual employees are provided disclosed payroll information on a W-2, which details their taxable wages, federal income tax withheld, Social Security tax, Medicare tax, and any state withholding, amongst other things. An independent contractor instead is provided with a Form 1099; this form details various types of income. Each form is sent to both the employee/independent contractor and the IRS, which is why it’s important to maintain accurate payroll records. As with many areas of taxation and compliance, there is overlap between many areas and this distinction is certainly no different; which classification you choose for your payroll disclosure can have an adverse effect on the person you are providing the form to. These situations are ripe for discussion and we’ve had countless over the years, providing insight to business owners on this exact circumstance.
Compliance forms are also associated with these taxes. While not as frequently as the deposits themselves, the payroll tax compliance forms are both quarterly and yearly. These forms disclose various aspects of payroll and the subsequent payroll taxes paid on this payroll, so it ties in with your other reporting. This is an area that can be delegated to Savvy & Suite, once again freeing up time and money to be spent in other areas. Forms 940, 941, W-2, and 1099 are just some of the various federal reporting forms that falls under the payroll umbrella in various capacities. There are also similar forms for state compliance; complicating this matter is the fact that each state has their own rules regarding compliance. Because we’ve done this for so long, we’re knowledgeable to state requirements and can keep you in good standing with local authorities regarding payroll tax compliance. We’ve got your payroll tax compliance covered, regardless of form or locality.
In today’s digital world, payroll processing companies abound in various forms, but it’s important to have a great relationship with these companies. In recent years, the amount of fraud associated with payroll companies has increased, with a major player in the industry recently succumbing to allegations of fraud. This had a devastating impact on many small businesses, as they were on the hook for payroll taxes they thought were paid but that were instead defrauded by their payroll service provider. If this can happen to a larger provider, it just goes to show how important it is to develop a steady relationship with your payroll service provider. It also shows that businesses should not just jump into relationships with any old online payroll service.
Due to increased reliance on technology, however, it is possible for Savvy & Suite to function as your remote payroll processing provider. More and more, we’re living in a remote world, with outsourcing of accounting functions becoming more prevalent. We would say that this is not a bad thing, as it lets us do what we do best (payroll processing among the many things we do best!) and allows you to similarly focus your energy on your strengths.
Savvy & Suite continues to be amongst the preeminent payroll companies for small businesses, as we take special care to keep you informed of the process and ensure that your payroll goes off without a hitch. We can tailor your payroll processes to fulfill your various objectives, whether it is solely payroll support or full-fledged handling of your entire payroll operation. Don’t just accept the advice of any payroll provider; be advised by the best in the business.