Finding a Payroll Processing Service

A payroll service can save you time, money and a whole lot of headaches

First off, no business is too small to use an outside payroll service. Most payroll processors will handle as few as a single employee. And considering the hassles and liabilities of processing payroll and payroll taxes accurately and timely, any business owner is wise to consider farming out this chore. In fact, with services easily accessible online, you'd be a bit daft not to at least consider the option. Payroll is one of the main tasks that small biz owners outsource. Top reasons include these:

1. It's inexpensive
2. It can save you tremendous amounts of time and trouble with tax filings and other government mandates
3. You have better things to do with your time than futz with payroll paperwork
4. Plus, you have choices. Do some of the work yourself (with an online provider, for example), or turn over the entire lot.

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Target payroll processing small business specialists

Tom Golisano started Paychex in 1971 with $3,000 and a good idea of how to make it easy and affordable for small biz to outsource payroll. The firm also offers payroll tax administration, 401(k) plans, Section 125 plans, COBRA administration and Workers' Comp. But Paychex isn't alone - several others are also great small biz choices.

Manage your own payroll in part or in full with an online service

For less money and a little extra time on your part, your business can manage its own payroll with online services that put everything you need in one easy-to-use place.

Talk to the big guys

ADP processes payroll for over 30 million people worldwide and is the giant in the field. But ADP has also worked hard to develop a small business following, and it can bring serious clout to its small business customers.

See what your business bank can offer

Many major banks have ventured into payroll services to capture more of your banking business.Some, like Bank of America, even offer free payroll processing if your employees have accounts there and sign up for direct deposit.

QuickBooks users look to Intuit for payroll processing options

If your business already uses QuickBooks, parent company Intuit also offers an enticing menu of online payroll solutions as well as QuickBooks payroll software.

• Payroll services are highly competitive. Basic processing typically costs between $2 and $3 per check, plus a base fee.
• Expect additional fees for account setup, adding/dropping employees and changing information.
• For a complete solution, expect to pay $3 to $5 per paycheck issued.
• Without proper knowledge of payroll tax rules and procedures, it is easy to make mistakes. For that reason alone, many small businesses use an outside service.
• Employees as well as federal, state, and local tax collection agencies must be paid on time, or you could face penalties.
• Each pay period, you may still need to submit payroll data to the service, via phone, fax or online. Even if salaries are fixed, your approval is still needed to make payments.

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