How does payroll outsourcing work?
Are you ready to go from DIY or in house payroll to letting someone else handle it for you? If you’re business has experienced growth as of late you may find it advantageous to let someone handle your payroll, by using a payroll outsourcing provider.
Payroll outsourcing can differ from provider to provider but this is the gist. After you decide what business to work with, the business will need information about your employees and your current payroll practices. You’ll need to provide a list of current employees for your business to your new provider. Your provider will ask for:
- Your pay period(s).
- Pay rates for employees.
- PTO policy.
- Benefits that are currently offered.
- Information about garnishments
- Other payroll deductions
In addition to information about rates and garnishments your payroll outsourcing provider will need to know if you still plan on filing your 940 and 941 taxes or if they need to take over that task. It’s best to let your provider handle that task. Your Federal Unemployment Tax Act, FUTA corresponds with the Form 940. The Form 941 relates to FICA, which is the Social Security and Medicare taxes that are paid on the behalf of your employees.
Who handles the payroll taxes is a huge differentiator?
At Atlantic Payroll Partners we’re a PEO, which is a professional employment organization. We typically handle the payroll and the payroll taxes for our clients. Our payroll fee includes your taxes and payroll. Due to the size of our business, we pay our taxes daily. When working with a PEO, you use the PEOs FEIN number; that’s how the taxes are handled so that you are no longer responsible for them.
The opposite of a PEO is an ASO. ASO stands for administrative services only, an ASO will typically provide payroll but they will not handle the payroll taxes. If they handle the payroll taxes, there is usually an additional fee for the taxes. If you work with an ASO your taxes continue to be filed under your FEIN and continue to be your responsibility.
That’s the simplest way to break down the difference between a PEO and ASO. PEO, you use the payroll companies FEIN; ASO you continue to use your FEIN.
What does payroll outsourcing cost?
The cost varies, you’ll normally pay either a flat rate or a % of the payroll. Typically, you’ll find that the overall cost is lower than the cost hiring someone to handle the task in house; when you compare the expense salary and benefits to payroll outsourcing. That’s a general way of calculating payroll outsourcing cost.
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About Atlantic Payroll Partners
At Atlantic Payroll Partners we believe we are the best, local payroll provider to help you grow your business. Even more than that. We’re a professional employment organization that offers an incredible suite of solutions for your business. In addition to offering payroll services we offer, full-service HR, workers’ compensation, accounting, and health care benefits. Our solution suite is back by over 100 years of combined experience in the PEO space.
We’re proud to say that we’ve helped businesses reduce employee turnover, increase revenue, make more money, and lighten their daily load by working with us. Our clients can offer their employees’ health care benefits and access to the same 401k plans that the Fortune 500 companies use without breaking the bank.
We welcome you to continue exploring our website, to learn more about Atlantic Payroll Partners and how we can help improve your business. We do our job, so that you can focus on yours.