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When you run a business and have employees, payroll is an unavoidable function of your operations. It’s estimated that as of 2019, 12% of of organizations fully outsource payroll and 26% outsource certain parts of it, which is significantly higher than 8% and 9% respectively as of 2015.
If you need a payroll outsourcing service for your Sacramento based business, here’s why you’ll want to choose us.
If you’re one of the 30,000 or so employer establishments in Sacramento County, you’ll need a Sacramento payroll service provider. Even if you do not have employees, you may still need to outsource various functions of your business, such as paying yourself if you are the solo owner of a business.
Payroll services focus exclusively on payroll matters like processing payroll tax forms, filing federal and state payroll tax returns, and issuing tax forms to your workers. Sometimes, benefits management and other employee compensation related matters also fall to payroll providers.
The chief purpose of hiring such a service is so you can focus more of your time and energy on other aspects of your business that require your attention and personal touch; as payroll laws are fairly uniform and can be best left to tax and payroll administration experts in this area.
Small and large organizations alike frequently use payroll providers instead of handling this task in-house.
Even if your business has a human resources department or manager, the chief purpose of hiring such a service is so you can focus more of your time and energy on other aspects of your business that require your attention and personal touch. Payroll laws are fairly uniform and can be best left to tax and payroll administration experts who focus solely on providing this service.
Payroll functions include the following:
Enterprise grade payroll reporting entails many of the same exact functions and purposes as standard payroll services. However, enterprise-grade payroll providers need to have the right tools and talent to correctly handle payroll duties for large organizations (typically those exceeding 100 employees).
Large employers will have their own human resources departments, but need to dedicate these employees to recruitment, monitoring existing employees, and keeping them motivated. By outsourcing payroll entirely or just certain aspects of it, such as benefits administration, it makes the enterprise more agile and freely able to focus its human and financial capital elsewhere.
Robust enterprise-grade payroll tools need to be able to handle more dynamic payroll activity, as large companies hire and fire more often than small companies do.
Modern technology has enabled payroll providers to offer automated payroll tax reporting. These services can be enabled in-house or outsourced completely.
After your employee or the payroll service inputs wage and salary data for each employee, the system will calculate gross-to-net earnings based on their pay rates. Taxes are automatically calculated and withheld based on current rates prescribed by law for payroll taxes, and the employee’s input via W-4 for federal income tax (and DE-4 for California income tax).
These rates are hard-coded into the automated payroll system, which decreases the likelihood of tax remittance errors and subsequently, fines from the IRS and FTB.
As an employer, you are legally responsible for ensuring that your share of payroll taxes, as well as the employees’, are remitted correctly to the tax authorities in a timely manner.
While payroll tax laws do not change as frequently as income tax provisions do, they can still be incredibly onerous to comply with based on the nature of your business and state payroll regulations can further complicate matters. For example, the immediate passage of AB5 in California created a major payroll tax compliance issue for employers throughout the state who were unsure if they were correctly classifying independent contractors, or if they now had to provide employee benefits.
Malfeasance with federal payroll tax laws can lead to a steep trust fund recovery penalty. Outsourcing your payroll helps ensure that you are working with professionals who primarily focus on payroll law compliance, and can keep your business up to date. For California-based businesses that now must navigate a more complex web if they use a mixed workforce, they need a provider offering payroll services Sacramento CA based companies have used to help them navigate AB5 and its related bill, AB2257.
Outsourcing your payroll in whole or part is an increasingly common business decision today. As tax and employment laws continue to grow more complex, more business owners are seeking outsourced payroll solutions to reduce the likelihood of making costly mistakes. Additionally, outsourcing payroll in whole or part also frees you up to focus on more crucial aspects of running and growing your business instead of doing compliance research or manually processing paychecks.
Sacramento payroll services are poised to assist clients with California-specific payroll compliance issues, and other nuances of California payroll taxes and mandatory fund contributions.
