7 Steps to Select a Payroll Processing Option

How to Decide on a Payroll Processing Service

1. Understanding the Requirements for Payroll Processing

The first step in deciding how to process your payroll is to be aware of all the tasks involved in processing payroll. Payroll activities involve more than just writing paychecks. You must set aside money and make periodic payments to the IRS and to state and local taxing entities. You must also file reports with these entities. All of the reports and payments must be submitted on a timely basis, in order to avoid fines and penalties.

2. Payroll Tax Regulations and Amounts Keep Changing

For 2009, the withholding tax rate has been changed, and the maximum amount subject to Social Security has been increased. There may be other tax changes during the year, which may affect your payroll calculations.

3. Questions to Ask to Help You Decide on a Payroll Processing Option

Ask yourself these questions to help you decide on a payroll processing option.

4. Options for Processing Payroll, Doing Payroll Reports, Paying Payroll Taxes

Here are three options to consider for processing your payroll, submitting payroll reports, and making payroll tax deposits.

5. Accounting Software with Payroll Options

Review these options for accounting software with payroll options.

6. Reasons to Outsource Payroll

Even if you have only a few employees, you may want to consider sending your payroll out for someone else to do it. Here are some factors to consider in outsourcing payroll.

7. Comparing Payroll Processing Services

How do I decide on a payroll processing service? You can let an assisted service do the work for you, or you can have an online service that helps you do it yourself. Learn more about several payroll services and their costs.