What you need to know about hidden payroll processing fees
Are you looking for a payroll processing company but have concerns about hidden payroll costs? Here are a few things to consider.
While processing your own payroll can be convenient, it can also lead to costly errors. In the long run, these errors can end up costing more than the price of having a professional company process payroll for you. However, we understand the concern about additional fees to watch out for when outsourcing payroll. So, let’s talk about this.
BENEFITS OF PROFESSIONAL PAYROLL COSTS
The cost of a professional company doesn’t need to eat away at big chunks of your budget. There are some affordable payroll companies out there that can also relieve you of the time and stress involved in accurate processing.
Some benefits of using a payroll professional include making sure of the following:
- Retirement plans and health insurance that are handled correctly
- Payroll tax deposits and returns that are filed accurately and on time
- Year-end processing, including W2s, that is done correctly
WHAT TO LOOK FOR IN A PAYROLL PROVIDER (HIDDEN FEES?)
When looking for a reasonably priced payroll provider, make sure that you are comparing all the costs that will be charged for the services you need. For instance, some companies will quote an initial low fee.
But what you will come to realize is that the initial “low” fee they’re claiming to offer only covers the price of processing paychecks, not an all-inclusive service.
For example, are you aware that some payroll providers charge you a fee just to get started? While this is just a one-time fee, it’s still an extra payroll cost that you likely weren’t expecting. While some companies may waive this fee for you, it’s not a guarantee.
Nonetheless, it’s helpful to know that the costs, structure, and pricing for basic payroll varies. Thus, one major benefit of this is that most businesses can find a service that fits within their budgets — including yours!
WHAT ADDITIONAL FEES COULD PAYROLL COMPANIES CHARGE?
As we just stated, there’s no one pricing structure that works best for all small businesses. Still, it’s important that you find out if there are additional fees. The following are some fees to watch for when you’re choosing a payroll provider.
- Your payroll company may charge you for full-service tax filing features, which include processing your state, federal, and local taxes, payroll tax deposits, monthly/quarterly tax filings, or annual tax filings and W-2s
- Payroll processing services may charge an implementation fee. This is a setup fee that often covers things like adding all your employees into the system or adding additional employees.
- There may be other charges based on how you choose to pay your employees. For example, a payroll provider may charge extra for direct deposit, while others may charge an extra fee if you require printed checks.
- If you use payroll software, look out for customer support fees or maintenance charges.
- Processing garnishments and child support liens or adding pre-tax and after-tax deductions.
Nobody likes hidden fees, so make sure to do your research! If you’re looking for the right online payroll service for your business or simply don’t know where to start in this process, get in touch with us! Our team is ready to help.
Jeanie Edgecomb, CPB, CPS, Director of Administration
Smith Marion & Co.