If you mention the word payroll to a small business owner, they may wince or get stressed out. Small businesses struggle to earn enough revenue to maintain payroll.
Then there are changing employment laws, payroll taxes, and trying to communicate with the IRS. These things only add to the stress.
You might find yourself in a similar situation where it might make sense to outsource payroll. Then you look at your bank account and think that you can save money by doing DIY payroll.
Sure, you’d save money, but is doing payroll yourself worth it?
Keep reading to find out.
What’s Your Time Worth?
Small business owners spend 68% of their time on administrative tasks, including payroll. Less than a third of their time gets devoted to growing the business.
How much more revenue can your business generate if you spent more time on growing the business?
Consider the stress that occurs every time you have to process payroll.
What’s your well-being and mental health worth?
The answer to those two questions alone should convince you to look at professional payroll services.
You’re Not a Tax Expert
There’s a lot more to payroll for small business than just cutting checks. You have to calculate the correct tax withholdings and forward those funds to the IRS through payroll taxes.
The IRS is unforgiving when you make a mistake. The IRS could assess a Trust Fund Recovery Penalty against your business. That penalty is 100% of the taxes owed.
Late filings come with penalties and interest.
You might try to save your business money by doing payroll yourself. In the end, that decision could end up costing you more.
A payroll company like this service ensures that your business files taxes on time and is compliant with tax laws.
Employment Laws and Payroll
There are labor laws regarding payroll that your business has to comply with, too. The main one is to classify your employees and contractors correctly when you hire them.
The IRS and state tax agencies are going after businesses that misclassify contractors. They believe that companies misclassify to avoid paying payroll taxes.
Even if it’s a mistake, you’re responsible for fines, penalties, and interest.
There are state and federal laws that regulate overtime pay and record keeping.
Unless you’re an expert in employment laws, you’re creating a huge financial risk. Reduce the risk to your business by hiring professional payroll services.
They understand payroll and employment laws. They can guide you, so you make smart decisions to help you grow your business.
DIY Payroll vs. Professional Payroll Services
Should you stick with DIY payroll? Only if you want to continue on the business trajectory that you’re on. Otherwise, hiring a payroll service is a good business decision.
Think of hiring payroll services as a type of insurance policy. This insurance policy happens to save time, reduce stress, and keep your business in compliance.
Do you want more helpful business insights? Check out more business articles on our site.
