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What Does a Payroll Company Do and How Does It Work?

For most companies, payroll is easily their largest expense. Clearly, payroll is a huge part of running a business and consists of many moving parts. Handling all aspects of payroll such as tax calculations and payments, time and attendance, wage garnishments, manual check calculations, etc. can be a lot to manage, let alone staying familiar with all HR regulations to ensure you are in compliance.  Because of this, many companies opt for hiring a payroll service provider to take on these responsibilities.

In addition to basic payroll processes, there is a tremendous amount of data generated by the payroll process, and utilizing this data, such as job costing & labor distribution information, to make business decisions is critical to most companies.  Payroll service providers are there to take those processes off your plate so you can focus on your business.

From a high level, payroll service providers work with their clients to ensure that their employees get paid on time and the employer stays in compliance. There are numerous services provided, including:

  • Payroll tax calculations
  • Payroll tax payments to all agencies (local, state, federal)
  • Managing electronic payroll records for employees and employers
  • Manual check calculations
  • Wage garnishment management
  • Direct deposit
  • Keeping track of time and attendance for employees
  • Job costing
  • Maintaining compliance with state and federal payroll laws and regulations
  • Reporting for 401K, pension plans, and workers compensation insurance
  • Required monthly new hire reporting for all states
  • Modules for online employee management such as paperless new employee onboarding and benefit administration.

Often a payroll service provider will work with a company’s current timekeeping system to help keep track of all employees’ hours and wages. In some cases, the service provider will even offer time and attendance software and hardware options that make it easier to transfer that information over for easier payroll calculation and overall time management and job costing.

In addition to time and attendance, some will also offer Human Resource solutions and assistance. These types of additional services help businesses keep up with various labor laws and maintain compliance. It also serves as a useful tool to use when dealing with various personnel issues.

Choosing a payroll service provider to take these things off your plate helps streamline this portion of your business. You are paying a professional to ensure that you remain compliant, your employees get paid on time/correctly, and you have the correct tools to manage your workforce.

Looking for a payroll service provider you can rely on?  Payroll Systems offers payroll solutions that are easy to scale and a dedicated payroll specialist to ensure your specific payroll needs are met. Talk to us to learn more.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.