How many individual owners of small businesses and even more established companies may benefit from using a payroll outsourcing company to handle their HR work. There is no one fits or solution and considering the different options of a payroll outsourced company can allow you to better choose a plan that works for your organization.
The Full Service Option
The most extreme level of service that a company can get out of a payroll outsourcing solution involves the payroll outsourcing company to hire employees for you. This type of organization is called a professional employment organization and will hire employees directly and pay their salaries for you.
In exchange, you will be responsible for paying these organizations the wages, employment taxes, and a significant markup for the services. Still, many small businesses that do not have the resources to build out an internal payroll solution will benefit from the structure.
This is Particularly true of organizations that are looking to expand overseas and do not want to handle the technicalities of setting up organizations and subsidiaries and these international countries do the various regulatory burden’s that are there.
Other companies choose to only export to a third-party consultant some aspects of their payroll functionality. These payroll outsourcing companies can have an third party file payroll tax returns for them, can have them submit payroll taxes to the state agencies, and can contest payroll tax cases with the agencies, once they are given proper power of attorney rights.
Some organizations will perform this procedure is all by themselves and not use an outside company to assist them. Given the marginal cost, and the distraction that running your own payroll can provide, particularly in a complex regulatory environment, outsourcing your payroll is commonly done and is a better solution for all but the largest and most technologically advanced companies here.