Payroll and payroll tax administration happens to be one of the most time-consuming and annoying tasks for small businesses owners. In fact, according to the NSBA 2014 Small Business Taxation survey, payroll taxes were ranked number one for the most financially burdensome and number two for the most administratively burdensome federal tax among small firms. That same survey went on to say that 1 in 10 small businesses report that they spend 10 hours per month on payroll taxes alone. That’s three full works weeks spent just on payroll taxes – a lot of man hours spent on one task.
As a small business owner, and possibly the one handling payroll, it’s probable that much of the treasured time you value for your business’s growth may be spent on payroll administration. So, to get back to growing your business and generating revenue, here are a few ways you can alleviate the time burden of payroll and payroll tax administration. How can you relieve the time spent on payroll and payroll taxes?
Relieving the Time You Take on Payroll
Handle it in-house. One of the ways to relieve the time burden you face with payroll and payroll taxes is to take care of everything in-house. Having in-house resources ensures the job gets done, but it’s not necessarily the most time-efficient. You’ll need to procure payroll software, hire someone for data entry, process W2s and deal with court ordered garnishments. This is all very time-consuming for one person. Not to mention all the time spent educating yourself or an employee on payroll and payroll tax procedures (FICA, FUTA, SUTA) specific to your state and your industry. Without knowing payroll and the tax industry inside and out, there can always be a room for a mistake, which could be costly and/or take a lot of time to fix.
Outsource it. You can also consider outsourcing your payroll to a payroll provider. That means that you or someone in your company will still handle HR tasks, such as benefits administration and claims management, and a vendor will take care of your payroll administration. However, with this option, you are now dealing with the vendor fee, plus a lot of extra fees such as report fees, job-costing fees, certified payroll fees, check charges, tax deposit fees, and more depending on your needs. Plus, even though you are getting rid of your payroll frustrations, you are now burdened with managing another company along with all of the other vendors and responsibilities that you face as a small business owner. Therefore, outsourcing with a standalone payroll vendor may not actually be saving you time (or money).
Partner with a specialist. Another option is partnering with a Professional Employer Organization (PEO). A PEO will handle all your administrative duties for you, including payroll and payroll taxes. It’s the job of a PEO to ensure that your business needs are taken care of in a timely manner and at an affordable price. When you use the services of a PEO, you and the PEO form a partnership, and the PEO will act like an extension of your company (as far as Uncle Sam is concerned). A PEO handles all of the most basic, but necessary, functions of any small business. Plus, it will ease your mind to know that your payroll administration is being taken care of by a trustworthy and highly-knowledgeable staff.
If you’re like most small business owners, your time is valuable, and the time you spend on your business should be devoted to generating revenue, not dealing with payroll and other administrative tasks. That’s why finding the right payroll and payroll tax administration solution is essential for the growth of your small business. So, if you’re struggling with finding time to tackle administrative tasks, it may be time to consider handling your payroll and taxes differently.
To find out more information on which payroll and payroll tax administration option may be right for you, check out our free eGuide, The Complete Guide to Human Resources: Which Option is Right for Your Business.