Payroll is the life force of your company and for your employees, which amounts to being one of the largest expenses you will have. Employee compensation goes far beyond their paycheck. In order to keep your workers happy and your business functional, there are other employee related expense that need to be taken into consideration, such as; vacation and sick time, overtime, commissions, bonuses, health benefits, severance pay, and any other benefits you may offer and provide. This is just the tip of the iceberg, when you look beneath the surface, there are also things like Medicare and Social Security Taxes, any other taxes that your state may require, along with state and federal unemployment insurance to be considered.
With all of that being accounted for, your organizations’ or company’s payroll can consume anywhere from 60 to 80 percent of a large amount of small businesses overall revenue. It is important to be sure there are never any payroll mistakes, or it could potentially cost your small business even more. For example, if your company’s pays its payroll taxes late, the penalties are as follows: If the payment is between one and five days late, the IRS charges a penalty of 2 percent of the unpaid tax. Deposits made six to 15 days late are charged a 5 percent penalty. If your payment is more than 16 days late, the IRS will charge a 10 percent penalty. Here are a few suggestions on ways that you can save some of that hard-earned money when it comes to handling your payroll.
Consider Outsourcing Payroll
Handling payroll is a large task and if you are currently taking it on personally or within your business somehow, it is likely that you are spending a lot of time and resources on organizing your payroll alone. It doesn’t take long before it can become expensive and very time consuming. As a business grows from small to medium-sized, the burden of payroll will also increase. Eventually, you will have other things to focus on than the intricacies of handling payroll. There are many things that can fall to the wayside like new regulations, deadlines, or even calculation errors when it comes to the technical aspects such as tax-exempt items. Overall, outsourcing for your payroll needs will alleviate the stress that comes with overseeing your own payroll and handling the wages of your employees. This will also help minimize calculation errors, avoid any penalties, and reduce the risk of spending too much money and effort on a task that others specialize in.