Want to Change Payroll Services? Here's What to Expect
Thinking about changing payroll services? Are you tired of unexplained fee increases? Are you willing to do simple data-entry each payday if it meant it could seriously lower your fees without hampering quality?
Many small accounting, bookkeeping, and tax businesses offer inexpensive payroll services. If decide you want to change from a big-name provider to a smaller payroll firm, your new situation might look like this:
- One time set-up fee, payroll service handles set-up
- Payroll customer enters hours worked and prints paystubs each pay period
- Payroll service handles all tax payments and tax returns
- Payroll service offers electronic services for all transactions--direct deposit, tax forms, tax payments, W-2s
- Payroll service offers ability to pay sub-contractors with direct deposit, then issue and electronically file 1099s at year-end
- 3-4 week lead time before processing first payroll with new payroll service
- Lower monthly rates than the big name payroll services
If you determine that the smaller payroll service will meet your needs, be sure to have the following information available as soon as possible:
1. All previous payroll tax returns for the current year.
2. For each and every employee that has worked for your firm during the payroll year, whether still employed or not:
- Complete name
- Last known mailing address
- Social Security number
- W-4 (for filing status)
- Hire date
- Quarter-to-date earnings and withholdings
- Year-to-date earnings and withholdings
3. Information about your company:
- Company type (sole-proprietor, s-corporation, etc.)
- Company address
- Date you plan to run the first payroll with the new service
- Federal employer ID number and state employer ID number
- Federal filing requirement
- Tax payment schedule for both Federal and state
- State tax rates, if applicable
- Pay schedules (when/how often employees get paid)
- Vacation and/or sick leave policies
- Deduction information on any retirement plans and insurance premiums
- Garnishment information
Consider enrolling in all electronic payroll services the new company offers. Not only do these ensure accurate and timely tax filings and payments, once established they are much easier than the old system of paper checks, paper coupons, trips to the bank, and trips to the post office.
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