As a small business owner, there are some things that you know you’re expert at. Sometimes you do things because you want greater control. Sometimes it’s because you want to save money.
When it comes to planning for and doing payroll, what should you do? What are the options available, and what are the pros and cons of each?
1) Totally DIY (Do It Yourself), get the tax tables and do the calculations, print the checks and do the reporting yourself.
2) Buy or subscribe to Payroll Software that does some of the work for you.
3) Use a Payroll Service.
- Most affordable – Look up the right tables and buy stamps.
- You’re in control over calculations, payments and timing.
- Total confidentiality.
- Most prone to errors – penalties and frustration can be expensive.
- You’re on your own. If you make a mistake, there’s no one to call for help.
- Requires the most work and time spent.
- You’re doing the entry, but the software is doing the calculations.
- Must faster than the DIY approach.
- A bit more expensive, but not too bad. Monthly fees with possible add-ons per employee.
- Need to learn the software.
- Need to make sure that it’s regularly updated.
- You’re writing the checks and making the proper bank deposits.
- You must file the reports correctly and in a timely fashion.
- There may or may not be a person to provide support if you run into trouble.
- Quick learning curve. Systems can be web-based, or you give the hours to a payroll specialist over the phone.
- They have phone support if you run into trouble.
- If you subscribe, they can provide direct deposit, automatic withdrawals of payroll and fees, automatic tax payments and filings.
- There are a variety of services available, if you want them, from Unemployment Support, HR support, Employee Handbooks, Tax Filings and guaranteed no penalty tax payments.
- The most expensive of the options. Be sure you know and understand ALL the costs, including quarterly reporting and annual processing fees.
- You give up total control of your information and options when filing.
Nothing is more sacred in the running of your business than your payroll. You can certainly do it in-house. But be sure that you do it correctly and exactly. Your employees will appreciate it, and you will avoid a very painful headache.