Part of running a business is managing a dizzying array of moving parts. From handling finances to hiring the right people to making sure that you fulfill all of your legal responsibilities and trying to actually turn a profit, it can be more than a full-time job to do it all. Any slight misstep could change the entire trajectory of your endeavor for the worst.
To mitigate some of these risks — and maintain a bit of their sanity — business owners sometimes look to outsource some of those moving parts to other companies. Delegating responsibilities to another organization means that there is one less thing on a business owner’s plate, allowing them more time and energy to fulfill their other obligations.
With remote work massively expanding following the COVID-19 pandemic, payroll management is being outsourced more and more by business owners who are looking to lighten their load and streamline two of the most important aspects of their business: Making sure their employees get paid and making sure they pay their taxes.
One way to do this is through an employee payrolling service. An employee payrolling service can not only take over payroll for a business and submit their local, state, and federal taxes, but they can also take on pretty much any other employment-related responsibility, such as employee insurance and worker’s compensation.
If you’re a business owner looking for ways to make your life a bit easier — and to let your company run a bit more smoothly — utilizing an employee payrolling service may be the solution for you!
If this sounds good to you, take a look at this quick and easy guide to help you better understand exactly what an employee payrolling service is and why a business owner will benefit by using one.
What is an Employee Payrolling Service?
An employee payrolling service is a third-party company that can be hired to take on the payroll and other employment responsibilities of your business. This means that they will technically be the employer of the workers they manage, taking on the costs, tasks, and liabilities associated with their employment. An employee payrolling service is also responsible for depositing and filing the taxes of the company that hires them.
Other Responsibilities of an Employee Payrolling Service
While the main tasks of an employee payrolling service are paying your employees and paying your taxes, there are a number of other tasks that they take on. Possible responsibilities that you may delegate to an employee payrolling service might include, but are not necessarily limited to:
- Performing background checks and drug screenings on potential and current employees
- Issuing W-2 forms to new employees
- Developing and maintaining employee contracts
- Onboarding new hires
- Offering and administering employee benefits
- Collecting and processing employee time sheets
- Handling worker’s compensation and unemployment claims
- Employee termination
As you can see, an employee payrolling service can take on a lot of the more time-consuming, mind-numbing, and downright boring aspects of employee management so that you can focus more on the big picture aspects of running your business.
If you’re not already sold on the idea, here are six more good reasons to use an employee payrolling service:
1. Taking Advantage of the Gig Economy
Independent contractors have become a larger and larger portion of the modern workforce for several years now. With the COVID-19 pandemic completely altering the economic landscape in 2020 and turning the work-from-home model into the only viable option for many, the gig economy has expanded tenfold.
There’s a tremendous pool of highly skilled, multi-talented workers waiting for you to hire them, but there’s a whole different set of rules that you need to understand in order to employ them as independent contractors. What business owner has time to learn all of that?
That’s where an employee payrolling service comes in. They can take on your contingent workers as employees of their own and handle all of the mess of contract creation, onboarding, tax and labor law compliance, payment, and any other employment-related responsibility that needs to be dealt with along the way.
Letting an employee payrolling service take on independent contractors for you opens up a whole new pool of hiring opportunities without further complicating your life as a business owner.
According to Forbes, the gig economy is growing three times faster than the traditional workforce today, with almost half of all millennials saying that they make at least part of their income through freelance work. Independent contractors are the future of the workforce, and an employee payrolling service is one of the best ways to get ahead of the curve and take advantage of the trend.
2. Onboarding New Employees with Ease
Getting a new employee on the books can be a pretty complicated process. Before they’ve been entered onto your payroll, they need to fill out a bunch of paperwork, go through background checks and pass drug tests, agree upon and sign a contract, and more.
With an employee payrolling service, all you need to do is send your service the information about the new hire and they’ll do all of the mundane tasks for you. Some employee payrolling services will even do the hiring for you. Check out this post to learn about the other advantages a workforce solutions provider can offer your business.
3. Expanding Your Business into New Territories
One of the biggest advantages of an employee payrolling service is the opportunity that they present for a simplified and streamlined expansion of your business into new states or even international territory.
Learning about the various employment regulations of each state — or of an entire country — can be a tall task. Failure to understand these regulations can spell doom for you and your business. Putting that task in the hands of an employee payrolling service means that your business can grow exponentially without your level of risk rising at the same time.
If you’re looking to expand internationally, your employee payrolling service can establish a payroll in the host country, keep abreast of changes in local tax and labor regulations, and ensure compliance with immigration laws.
4. Handling Tax Compliance
One of the worst nightmares for any business owner is an unexpected knock on the door from the IRS. With an ever-changing and overly complicated set of regulations that come with considerable legal and financial ramifications should you fail to comply, any errors in your taxes can cause a world of trouble.
Things become even more complicated, too, when you begin to hire contingent workers from all over the country and are then subject to the labor and tax laws of the jurisdiction that they live within.
In order to ensure that your local, state, and federal taxes are being correctly filed, an employee payrolling service stays on top of local and state labor laws and tax laws so that you can stay compliant.
5. Opening Up Your Schedule
As a business owner, you shouldn’t have to micromanage every aspect of your company just to keep the ship from sinking. The more stress and pressure you have from all the various tasks you need to accomplish on a day-to-day basis, the less likely you are to be able to adequately accomplish them. Your entrepreneurial efforts should earn you the right to some free time where you don’t have to think about your business at all.
Hiring an employee payrolling service to take on all of your various employment responsibilities doesn’t just mean that you can spend more time trying to figure out how to turn a profit…it means you can spend more time doing whatever you’d like to do! In other words: It will not only improve the quality of your business…it will also improve your quality of life!
6. Saving Money
How can hiring a whole company to do your work for you be cost-effective? That’s a fair question to ask. But when you really break it down, you’ll find that hiring an employee payrolling service can ultimately save you more money than it costs you.
Let’s say you didn’t have an employee payrolling service running your payroll and filing your taxes. Who would perform these tasks? They still need to be done. Either you’re going to pay someone to do things or you’re going to be doing them by yourself. It comes down to a choice of money or time, and as we all know, time is money.
Interested in Hiring an Employee Payrolling Service?
Now that you’ve been thoroughly educated on the benefits of an employee payrolling service, why not hire one for your business? Employnet Workforce Solutions offers employee payrolling services for businesses of all sizes and manages workers in all states. Give us a call at (866) 527-HIRE or contact us today to find out more about what we can do for you and your business!