You might be tempted to try to save money by processing your payroll in-house with software like QuickBooks Online Payroll. But, Bookminders always recommends that our clients outsource their payroll to a payroll service because there are significant risks to processing your own payroll.
If you do your own payroll, you’ll be responsible for:
- Fixing your own problems.
- Fees and penalties if you file late or make mistakes.
- Calculating local taxes.
- Printing your reports.
- Purchasing regular updates of the tax tables.
The bottom line is that using a payroll service is usually less expensive in the long run for a small organization. A payroll service:
- 1. Provides telephone access to a local payroll representative who can fix problems.
- Guarantees on-time filing of payroll tax returns, which indemnifies you from late fees and penalties.
- Provides complete reports in a form that can be easily entered into your bookkeeping system.
- Makes sure you are in compliance with changing tax rules and government regulations.
- Provides other convenient services like direct deposit, 1099 preparation, pay-as-you-go worker’s compensation insurance, HR services, benefits administration and time tracking systems.
Even if you have only one or two employees, you should probably use a payroll service. Ask yourself, “is it worth my time to learn all the things I need to know about payroll taxes just to run a 2 person payroll?”