Who Handles Your Payroll? Outsourcing vs Doing it Yourself
All businesses need to process payroll, but how they choose to do so varies depending on their size and industry. Large businesses with hundreds of employees will likely outsource their resources simply due to the number of employees they need to write checks for. Small businesses, on the other hand, can get away with handling their own payroll because they have fewer employees to worry about. However, for convenience sake, small employers might still decide to hire an outside company to do their payroll. Deciding who will handle your payroll as a small business is a big decision, and it is best to think about the advantages and disadvantages of the different options before deciding on anything.
As a small business owner, you have a lot expenses to worry about. Unlike large companies who may have profits in the billions, you probably have less to work with and are concerned about budgeting. This is one reason you might want to process your own payroll for your employees. Even if you don’t know the right formula for deducting taxes, a tool like a payroll withholding calculator can help you figure it out. A payroll withholding calculator, which can be found free online, allows you to enter each employees’ information so you an easily calculate individual checks. Payroll deduction tables are also distributed frequently by the Canadian government to help employers figure out what should be deducted from each employee’s check. Even with these tools, figuring out how to calculate payroll deductions can be very difficult, especially if you don’t have any experience in the area.
Hiring an outside payroll processing company to handle your payroll can save you the stress of trying to figure out the proper tax deductions for each employee. Payroll companies have trained professionals that can take care of all of your employees for you. By outsourcing, you reduce the amount of work you have to do because you have just a single report and invoice to deal with. You also don’t have to worry about making costly tax errors.
If you are a small business, it is important to weigh your different options. If you know how to process payroll, you can save money by doing it yourself. If you don’t, however, outsourcing is a great option.
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