There are two different types of services you can use to outsource your payroll. One service can handle all your payroll needs, including paycheck processing, taxes, timekeeping, and document tracking. The second service is a professional employer organization (PEO), which can help with payroll, benefits, retirement, regulation compliance, and other human resource needs.
Handling payroll can be the biggest headache for a business’s HR, and outsourcing payroll is a standard solution. A variety of PEO companies offer services in pay, but they also can help with more than just payroll. A PEO company will help with benefits, retirement, government regulation compliance, and workman’s compensation.
Payroll Management Services
Payroll management services generally handle functions that are related to paying your employees and federal payroll taxes. The employer still retains all liability when using a payroll service. Numerous payroll management services offer services that are usually under administrative services.
Professional Employer Organization (PEO)
PEOs do everything that a payroll management service does, but they also handle all aspects of human resource management. PEO companies help your business with recruiting and hiring, employee benefits administration, and government compliance. Additionally, they can handle tasks such as employee onboard and verification. Professional employer organizations will act as co-employees, and provide worker’s compensation insurance and health benefits. PEOs can provide workers compensation and health benefits at lower rates than an individual employer can get because of there large pool of employees.
Shared Responsibility
Outsourcing payroll to a PEO allows you to share responsibility for several things that makes your efforts in the business more accessible. Small business owners are not experts in all fields of business, but also they do not have the time and energy to learn everything HR-related. A PEO will help manage changing government regulations, local taxes, and tax filings. Sharing responsibility with a PEO means you have back up with payroll and compliance issues.
Save Time and Effort
By outsourcing items to a PEO company, and sharing responsibility, you don’t have to be an expert in all areas of HR and payroll. With HR and payroll being handled by a PEO company, it means that you, as an employer, can have more time to engage in more revenue-producing activities and developing your business. A good PEO company will also help with recruitment, benefits analysis, and other administration services.
Benefitting from a Payroll Service or a PEO Company
If your business is small and just starting out, you might need the full-service benefits that a PEO company can offer. Outsourcing your payroll processes and human resources can help with growing your business. Human resources require a great deal of time and effort, which can pull you away from your primary focus, which is growing your business.
A PEO service will provide professional advice and ensure compliance with federal and state employment laws and will save you money on workers compensation and health insurance. There are substantial benefits that make a PEO service different than payroll management services, such as a professional employer organization provides a full range of human resource administration, like payroll services, recruiting, hiring, onboarding, benefits administration, and compliance.
Final Thoughts
A PEO company will save time and trouble, and access to experts in the field that can help you and your employees. PEO services create a more desirable employer and workplace for present and future employees. Also, by letting you free up time to focus on your business, you can focus more attention on customers, products, and services and building a successful business.
