Business owners find that payroll is typically one of the biggest expenses that is encountered with running a business. Employment taxes along with wages is going to make up the vast majority of your payroll costs, but there are other things that need to be taken into consideration, like the expense of simply processing your payroll that will ultimately affect your business’ bottom line. Regardless of your company’s size, saving money is always a good priority, and here we have listed a handful of ideas on ways that you can reduce your payroll service costs.
Taking an inventory of what your company’s exact wants and needs are will greatly benefit you in the long run. Whether you handle the administrative side to payroll yourself, employ a staff member to help you, or outsource for these needs, the best way to take control of your payroll processing and save money is to have a clear idea of what exactly it is that you need done. Knowing what you are currently lacking will help you define what actions need to be taken without wasting precious time or resources to help you figure it out.
Making sure that you have accurate information on file for each individual employee is another crucial step to cutting payroll costs. Items such as the date of birth, address, social security number, and other personal identification information is extremely important to keep in your employees’ personal files. Making sure that all of these details are correct will save a lot of work and time. This is the primary step to make sure your payroll costs are not inflated. Without the need to correct information that should already be on file, you will cut the time that is required to accomplish basic tasks significantly.
Become a Payroll Tax Compliance Expert
When you look at handling the process of making payroll, there are several adjustments that you may be required to make. Tax payments, bonuses, commissions, wage adjustments and wages in general are going to need to be taken into consideration. There are several deductions that should also be accounted for.
Adjustments and deductions that will need to be made are probably going to vary with each individual employee. Making mistakes due to poorly kept files can become a big expense. When your staff expands, or your business grows beyond state borders (either the states your employees reside in or where your business is being conducted), the process of handling taxes can become much more complicated. It has been stated that 40% of small businesses are being penalized for addressing payroll taxes either late, or incorrectly. Knowing the requirements of both the state and federal legal requirements when it comes to your payroll will help you save money in more ways than one, including avoiding penalties. Not knowing what the laws and requirements are do not make you exempt from potential penalties when it comes to your state tax agencies or the IRS.