You Are Smart Enough to Run Your Own Payroll But Should You?

If a business, is going to get into trouble, this is a big one. Big lesson # 1: Once you run pay the trustees taxes (withholding, FICA and Medicare) no longer belong to the business. If you do not file the proper returns on time there are penalties. If you do not turn over the…

If a business, is going to get into trouble, this is a big one. Big lesson # 1: Once you run pay the trustees taxes (withholding, FICA and Medicare) no longer belong to the business. If you do not file the proper returns on time there are penalties. If you do not turn over the trustees taxes on time, there are interest and penalties involved and the IRS will put a lien on your assets and threaten to seize everything. The Boston Business Journal publishes all the scofflaws and how much they owe on a regular basis. Some of the amounts published are incredible.

There are many ways to run payroll:

Least desired: Excel Spreadsheets: come on people, this is not good!

Unless you are going to hire / train payroll staff this is the second least desired: your software calculates it for you, but you do the rest. For example, you can buy an annual subscription from QuickBooks or Peachtree (I am sure there are plenty of others). What is provided are updated tax tables as well as federal and state payroll reports. You enter the hours, print the checks, file the reports, make the tax deposits, file and pay your state obligations for unemployment, etc. All this has to be setup by you or someone you hire. You can also setup to e-file.

So what is the problem? Not understanding payroll setup is one, not understanding how the software works is another (I have seen lots of double booking of payroll), and here is the big one: cash flow! If you are on a quarterly schedule, the bill when due can be quite large and the business has used the money for something else which legally it can not do. And do not forget about confidentiality.

Most desired: outside payroll service; yes this costs money! Decide what you need and shop around. It usually depends on the number of employees and the frequency of payroll runs. For example, 3 employees paid bi-weekly is a lot cheaper than someone with 100 employees who pays weekly. I have heard quotes as low as $ 35 per month to $ 200 all things being equal.

I can talk about QuickBooks because that where I have the most experience. They will assist you every step of the way in the setup. The hardest part is the setup because Intuit must be in full compliance. Everything must be in order ie TIN's, payments and reporting up to date if this is not a new payroll, state information, etc. Once setup, you just enter the hours and send to Intuit over the internet and they do all the rest! You just have to provide the cash! Doing it this way also accomplishes the accounting!

Outsourced Payroll Services – Advanced Growth For Your Business

Growth has always been the mantra of every business. This growth is achieved by hard work, taking the right decisions at the right time and by updating the business strategy frequently. All businesses whether big or small, need to have well defined roles and processes. A structured business is easier to operate. Any inaccuracies can…

Growth has always been the mantra of every business. This growth is achieved by hard work, taking the right decisions at the right time and by updating the business strategy frequently. All businesses whether big or small, need to have well defined roles and processes. A structured business is easier to operate. Any inaccuracies can easily be isolated and deal with quickly. This way the damage done is minimized and every situation becomes manageable. Such structured businesses have created new processes and roles to manage the day to day operations in a controlled manner.

Finance, Marketing, Production, & Sales etc. are a few of the major processes in any firm. Each of these may be further broken down to smaller processes. Payroll Management is one process that needs to be deal with carefully.

This is one core process that is executed in the business cycle. Calculation of net pay of salaries from its components such as gross and discounts such as tax etc. requires expertise. This is confidential data about the employee as it consist of personal information of the individual. Such calculations call for good knowledge of accounting skills. It should be transported out by a professional. Any erroneous calculations may lead to wrong payments and confusion in the minds of the employees. This also increases the workload as the calculations will have to be made once again.

An expanding business adds new processes to its business management system. Hiring and evaluating an accounting professional may not be an easy job for every businessman. It requires understanding of finance and accounting policies. Managing payroll has many complications such as salary declaration for new employees, modifying employees' salary package according to tax law changes and employee appraisals. While you may be best at running your business and doing what you do day in and day out, interviewing for accounting personal may not be the things you are very good at.

Outsourcing the job for payroll management is a smart way of carrying out all the business operations and you can find more time to invest in managing your business. Hiring an in house payroll specialist is less as compared to outsourcing the job. Payroll includes generation of new reports. The payroll information of an employee can be easily managed by the use of modern communication services. These business units have the proficiency to carry out payroll functions smoothly. These units allow your business to be better managed and budgeted. This way you will reduce your administrative burden. Outsourced payroll services have become a popular trend in many organizations today.

Is Global Payroll Hot or Cool?

A perfect storm of external impacts have left the HR industry looking at global payroll solutions to help them fight the war on talent, remain compliant, deal with regulatory pressures, mitigate their global HR risks and equally important, leverage new technologies and use 'big data 'analytics to understand their international people costs. Back when globalization…

A perfect storm of external impacts have left the HR industry looking at global payroll solutions to help them fight the war on talent, remain compliant, deal with regulatory pressures, mitigate their global HR risks and equally important, leverage new technologies and use 'big data 'analytics to understand their international people costs.

Back when globalization was the word of the day, multilateral payroll solutions were cobbled together based on domestic processes and ERP payroll modules, or in some cases “patches.” For large multinationals that could afford major IT investments in all of their international markets, these solutions were good enough. But then came the Enron scandal, SOX and the consequent wave of new regulations. Then to add the perfect storm, a cloud emerged, a transformational technology that offered MNCs a whole new way of thinking about their HCM applications, and importantly, an affordable global HR solution for the growing sector of micro-multinationals.

While the clouds were multiplying, a new SSAE 16 standard was instituted, to replace an aging SAS 70 standard and keep pace with the growing push towards more globally accepted international accounting standards. Both SOX and SSAE 16 address the flow of information into financial reporting systems, requiring those organizations to evaluate and document all the processes that are used to generate their financial reports, including the processes that are used by their service providers.

More recently, a provisional EU agreement has been reached on the principle of capping bonuses in the European banking industry, while US regulators have convinced seven financial institutions bankers to rein in bonus pay. More rules like this means more demand for global payroll analytics, a major challenge for global organizations.

It would not be a perfect storm without a financial crisis. The traditional MNCs have weathered the storm, a new wave of micro MNCs have emerged and everyone is adjusting to the new normal. There is a war for talent and traditional recruitment strategies are no longer acceptable. Cost control is imperative and global risk mitigation has taken center stage.

HR managers are becoming true human resource strategists: hiring local nationals, contracting temporary labor, seeking creative contingent worker strategies and maintaining global HR compliance. They have learned to expand their recruitment efforts outside traditional geographic boundaries, leveraging the specialized skill sets found around the world all while controlling human capital costs and implementing employee engagement strategies for their global workforce.

Yes, global payroll is hot, and very cool.

4 Useful Tips That Can Assist You in Selecting a Payroll Service

Selecting a payroll service provider when payday comes, employees automatically think that they will not only be given the salary, but will be given the correct amount of salary. A simple method to make sure that everyone is getting payment, and the IRS is not on your hind is a payroll service. Some people might…

Selecting a payroll service provider when payday comes, employees automatically think that they will not only be given the salary, but will be given the correct amount of salary. A simple method to make sure that everyone is getting payment, and the IRS is not on your hind is a payroll service.

Some people might believe that this service is a waste of time, because it can be done in a house. Neverheless, having an expert to agree with confusing tax laws, and to understand the cost of any mistakes is a big advantage. In this article, you will learn 4 useful tips that can help you in choosing the best payroll service. They are as follows:

1. Prices and Hidden Charges:

The first question that you should ask to a payroll service provider is how much they charge to give you this service. They may charge a fixed fee with an extra charge per check, or a fee based on the rate of payment. You may desire to pay your staff each week, but discover that each week will save your money; This is something that must be taken into account. Furthermore, do not forget to see that comprehensive details of the bill to find out those hidden charges that some companies might forget to write.

2. Exclusive Services:

Including paychecks, these services frequently provide other exclusive services for companies. These exclusive services are customized reports, retirement plans, direct deposit, administration of employee benefits, etc. A few organizations are able to build customized softwares to fulfill your particular needs. If your employees are in distinct states, you should ensure that the company has nationwide coverage capabilities. You can also discuss with the better business agency to discover if the company has any due complaints.

3. Recommendations:

Before you search payroll services on Google, you should ask people you know who have used this kind of service. It is good to have a recommendation from your friend, because it is better to trust that payroll service which is recommended by your friend, rather than any payroll service you do not know. Recommendations are the best method to find out the quality, and reputation of the company.

4. Ease of Access:

Nowadays, most payroll services permit access to a safe site for employees to check their personal payroll history. Having a website which is protected by a password to observe, and print pay stubs, check payroll history, and keep record of vacation and sick days gives a best service to your employees. By using this service, your employees can easily check their information that means it will definitely reduce the amount of questions you have to answer to your employees about payroll.

In the end, I want to say that payroll is a very important matter for any company, so always try to find a payroll service that can satisfy all the needs of your business. There might be some other helpful tips to select a payroll service, but I found the above-mentioned tips during my research, and I am sure they will also be beneficial for you.

What Is Payroll and the Need for CIS Payroll

Processing payroll for employees in a timely and accurate manner is essential to running a business, so the payroll accounting can calculate payroll salaries and wages, bonuses and responsibilities, determine the correct individual deductions and withholding taxing, and file tax reports and payments with HMRC. CIS Payroll relates specifically to the construction industry, it outlines…

Processing payroll for employees in a timely and accurate manner is essential to running a business, so the payroll accounting can calculate payroll salaries and wages, bonuses and responsibilities, determine the correct individual deductions and withholding taxing, and file tax reports and payments with HMRC.

CIS Payroll relates specifically to the construction industry, it outlines terms and regulates the way a sub-contractor is paid.

A construction company wanting to take on a sub-contractor must follow strict guidelines:

– You must first register your company with HMRC as a CIS Contractor.

– You must check the sub-contractor is infact a sub-contractor and not considering by HMRC as an employee, this check has to be done with HMRC.

– You need to verify with HMRC how much tax you need to deduct from the sub-contractor, 20% if the sub-contractor is registered, 30% if not.

Another consideration you need to make is weather the work your sub-contractor is carrying out actually falls within the CIS.

Taxes deducted from the sub-contractor is paid across to the HMRC monthly and also CIS tax returns need to be submitted to HMRC on a monthly bases, which shows the amount you pay to the sub-contractor and how much tax is deducted.

The deadlines for submitting these are tight and penalties for late submissions are high.

Budget Tax 2013 Changes.

The launch of RTI, RTI or Real Time Information is a new way of reporting information to HMRC about PAYE, in the past employers have to reported annually, but now employers are going to have to report every time they pay an employee, weather that's a directory employee, whoever.

This is going to have to be done electronically, HMRC has stated that very few exceptions will be made where this can be done on paper. So for most employers this leaves three options for to be compliant with RTI:

– You will either have to use the HMRC's basic PAYE software, which is free but limited to 9 employees.

– You can buy commercial software

– Or you can engage a payroll agent or an accountant.

HMRC has stated that there will be penalties for late submission, something you have to be careful off, it does not change the way you pay employees only a change to the way you report information.

This is a big change to PAYE, the largest since filing was introduce a few years ago, you need to use an experience accounting firm.

PS:

After April 2014 new government legislation in relation to false self-employment will come into force, this means if you are currently paid through CIS but there are elements of self-employment in your work then you could be at risk of fines or penalties by HMRC .

The solution to this is the new Umbrella payroll service. If you work an Umbrella Payroll you will be engaged under a contract of employment and we will work under a business to business contract with the agency. The contract rate will be payable to Ontime Payroll and we will deduct our margin from it and will fulfill our legal obligations by making payment to HMRC for Employer's National Insurance. The balance is your salary on which you will pay income tax and employee's national insurance contributions.

Prepaid Payroll Cards: The Perfect Way to Pay Underbanked Employees

It is becoming increasingly common for businesses to have employees who do not have a checking account. In fact, it has been estimated that one-third of the US population does not use traditional financial services such as checking accounts-also referred to as being underbanked. While this statistic is largely attributed to low-income households, factors such…

It is becoming increasingly common for businesses to have employees who do not have a checking account. In fact, it has been estimated that one-third of the US population does not use traditional financial services such as checking accounts-also referred to as being underbanked. While this statistic is largely attributed to low-income households, factors such as the current economic climate and the rising costs of banking continue to impact a growing portion of the work. Fortunately, there is a highly effective alternative solution for paying underbanked employees: Prepaid billing cards.

The Cost of Being Underbanked
The cost of not using mainstream financial services such as checking accounts can actually be more costly in the long-run. Check cashing businesses, for example, charge excessive fees that seem small on a per-transaction basis, but these fees add up over the course of a year. In fact, it is estimated that people who use check cashing services spend about $ 286 per year on fees-costs that can be eliminated when businesses pay employees with prepaid payroll cards.

Why Are People Underbanked?
There are obviously many answers to this question, but a few of the reasons people are underbanked include:
• Banks often do not offer the same services to people with lower imports. In some cases they do not even open branches in less affluent areas so that they can avoid low-income customers alike.
• Many individuals work long or odd hours that do not fall into the typical nine-to-five banking hours. They can not afford to hold on to their paycheck until they have a day off, and sometimes their day off is the day the bank is closed. Check cashing services appear to be the only option when they do not have the choice of using prepaid card cards provided by their employer.
• Some people, especially those from other countries, may not trust banks to hold their money. They instead prefer to have their money on-hand where they can control it.

Regardless of the reason, most underbanked workers do not realize how much money they're losing each month when they use alternative banking methods. Since it's such a small amount each time time (typically just a few dollars), they do not think twice. But if they were to add-up those fees over the course of a month or a year, they would certainly prefer a different system. However, when they do not have an employer-issued prepaid billing card, their options become very limited.

How Employers Can Help
Employers can help their hard-working underbanked employees by offering an automated, easy-to-use payroll alternative to paper paychecks. Prepaid payroll cards give underbanked employees the freedom to access their wages instantly and without wasting the time and money it takes to use a check cashing service. In addition to benefitting underbanked employees, prepaid payroll cards provided numerous advantages to employers as well:
• Automating the entire payroll process reduces the hassles of issuing paper paychecks, and lowers the amount of in-house staff needed to handle payroll
• Prepaid billing cards are in compliance with Regulation E for all secure electronic funds transfers
• Reducing the costs associated with paper paychecks, including printing, supplies, and other resources
• Improving reconciliation so an employer's bank account is up-to-date and reflect the current funds for the company
• Increasing employee satisfaction – happier employees are more productive and perform at a higher level

Paper check alternatives such as prepaid payroll cards simply make more sense for both employers and their underbanked employees. The time and cost savings alone make them the best way to pay and get paid.

Why Should A Business Payroll Be Outsourced?

Anyone who has any experience in running a business will testify to the fact that it is not an easy task at all. Keeping track of all the intricacies involved in the day-to-day functioning of the office can be a herculean task, to say the least. One of the most hectic and time-consuming of these…

Anyone who has any experience in running a business will testify to the fact that it is not an easy task at all. Keeping track of all the intricacies involved in the day-to-day functioning of the office can be a herculean task, to say the least. One of the most hectic and time-consuming of these activities is payroll generation. Payroll generation is crucial to any business as these taxes contribute to the income of the company. As there are a lot of rules governing this aspect, improper implementation of it can cause legal action to be taken against you and your company. To avoid such happenings, you can outsource the business payroll to professionals who will ensure that everything is running properly. Outsourcing the payroll is quite a beneficial activity for the company, as it provides advantages, such as –

* It Frees Up Your Time – Payroll processing is an extremely time-consuming activity, but being necessary it requires to be carried out properly. By outsourcing this work, employees can be free to pursue more revenue generating avenues for the benefit of the company. With more time to focus on selling, the profits will increase significantly.

* It Reduces Company Expenses – Payroll processing and accounting will require the company to hire an individual who is trained in the field. This will increase the cost of the company. By simply outsourcing it, you can get the services of an experienced professional and it will cost you much less than hiring someone full-time.

* Avoid Legal Action – The IRS has stated that most small companies face large fines, as a result of late or improper filing of returns and payments. Almost all service providers guarantee timely filing of returns and payments, which will reduce the worry of you incurring unnecessary penalties. This benefit alone justifies the outsourcing of payroll generation.

* Technological Advances – Payroll generation software is constantly being upgraded to provide better services. Small businesses may not be able to keep up with this constant development, which could lead to outdated services being used. By outsourcing to a reliable service provider, you can be assured that they are using the latest technology to provide comprehensive services.

* Knowledge of Constantly Changing Scenario – Laws and regulation relating to the functioning of companies keep on changing constantly and it is quite difficult to keep track of it all. The available service providers strive to keep them aware of all such happening, so that no improper tax is taken out.

One can see from the above points that outsourcing payrolls is extremely useful, not just for an individual but for the entire company as well. No wonder, salary is described as the most outsourced task of small companies by prominent magazines as well.

Running a Successful Business Requires Positive Cash Flow

Most people think that running a successful business is all about finding the right market, promoting the right products, and advertising the right way. While all of these things are important, none of them are essential as generating a positive cash flow. This guide will help you understand how to test a business model for…

Most people think that running a successful business is all about finding the right market, promoting the right products, and advertising the right way. While all of these things are important, none of them are essential as generating a positive cash flow. This guide will help you understand how to test a business model for the ability to generate a positive cash flow before spending too much time building it up.

The Basics of Positive Cash Flow

Most individuals and businesses measure their cash flow on a monthly basis. To do so, simply subtract all of your operating expenses to the revenue generated. If your result provides a positive number, you've made a profit (and have positive cash flow). If your result provides a negative number, you're losing money.

The easiest way to generate a positive cash flow is by reducing overhead. This means finding and running a business that does not require an office, insurance, employees, or raw materials. Most internet-based businesses meet this model. Typical expenses include monthly hosting and domain name. These tend to cost around $ 10 per month, and sometimes even less.

When reviewing a business's potential to generate a positive cash flow, always start by analyzing the potential overhead required to run it. The lower it is, the more likely it is to generate a profit.

Measuring Costs, Time, and Revenue

After you've determined the business you want to run, you'll need to start running some basic math to figure out how much revenue you'll need to bring in to make a profit. Most first-time entrepreneurs make the mistake of not including their time in the equation.

Before you put together your calculations, figure out how much money you want to make on an hourly basis from your business. Be sure to add this into the total “cost” of running your business to help get an accurate picture of the profits the business will generate.

For instance, if you want to pay yourself $ 30 an hour for running your business, and you want to work only 20 hours each week, you'll have a monthly salary cost of around $ 1,800. If after adding in your other expenses you find that your revenue does not generate any profit at all, then you need to look into another business model.

Adding all of this up on a spreadsheet is rather simple. In one column, list all of your expenses. Create a calculation that totals them up. In another column, list your predicted revenue and create a calculation that totals these up, too.

Perform a sum that combines each of these values, and you'll have a simple cash flow prediction spreadsheet that you can return to on a regular basis.

What Kinds of Businesses Generate the Best Cash Flow?

As previously, businesses with the least possible overhead create the best possible cash flow. Any business that revolves around creating and selling an information product (such as an eBook, program, or video series), will result in a single investment (of either time or money) that continues to increase in profitability with each additional sale.

As noted above, though, the amount of time you spend marketing, promoting, and maintaining the product should be a part of your cash flow calculations. So instead of doing it all on your own, sell your product on an affiliate marketplace.

There are a number of these sites on the internet, including ClickBank.com and Commissionjunction.com. They each have their own requirements and processes for promoting products through their sites, so you'll have to read up on them to determine which is best suited for your product.

What happens once your product is listed on either of these sites, though, is quite magical. Other people will start promoting, advertising, and selling your product for you. They earn a small commission in exchange for the sale, and you pocket the difference.

It's like profits on autopilot, and it results in the best possible cash flow that you could ever hope for – virtually 100% of your income will be counted as a profit. Of course, before you can get to this point you'll need to create a stellar product and prove that it has a viable market, which is not that difficult to do as long as you put some time into it.

Top 5 Benefits of Using Payroll Services

For small and medium businesses, one of the recurring tasks that can be time-consuming and complicated is processing the employees' payroll. Some of the tasks include but not limited to: determining the salary, the withholding taxes, various government and health benefits contributions, discounts for absences, sick leave updates, and a lot more. Due to these…

For small and medium businesses, one of the recurring tasks that can be time-consuming and complicated is processing the employees' payroll. Some of the tasks include but not limited to: determining the salary, the withholding taxes, various government and health benefits contributions, discounts for absences, sick leave updates, and a lot more. Due to these facts, there are a number of businesses who prefer to use external payroll services to reduce the cost and work load of their employees.

In a general manner, it is seen that outsourcing payroll will reduce the cost up to 50% if compared to in-house employees. It eliminates some of the “big tasks” such as hiring a payroll manager, purchasing payroll software or systems, etc. Beside, using external payroll support will free up a reasonable amount of time which can use to further the development and growth of a business.

Here are the top 5 benefits one business can gain using external payroll services:

1. Gains free time that can be use to develop core activities.

This is one of the main reasons why a number of businesses favor to outsource payroll system. It frees up great amount of time and resources that they can use for other important activities such as creating strategies for the growth of their business, employee performance evaluation, organizing team buildings, etc. The external payroll provider will be the ones to take the daily responsibility of managing any payroll-related tasks, delivering on-time results, and resolving issues timely, if there are any.

2. Prevent headaches.

Manual payroll calculations have been long gone as there are now various ways of automating the system that prepares and calculates the payroll on a single click.

3. Avoid penalties

Late year end tax returns submissions will definitely cost you a certain amount of money. Using external services that will take care of timely submitting tax and benefits to relevant agencies will save you from these penalties.

4. Decrease operational costs.

Since using the support of external services, operational costs will be reduced as there is no need to hire and train additional staff or consistently updating to the latest payroll software technology.

5. Peace of mind.

With the legislation consistently changing and updating, processing payrolls are becoming more and more complicated and a need to comply with the current regulations arises. By outsourcing payroll support, businesses will gain peace of mind by not worrying on how to comply with the latest statutory requirements and legislations.

What to Know About Payroll Outsourcing

Basics in Payroll Outsourcing Processing a payroll is complicated, error-prone, and time-consuming. According to the law, business owners are required to withhold a certain percentage of their employee's pay amounts or wages to pay their taxes. These payroll tax amounts are not very consistent then, making the task more complicated. These amounts can change depending…

Basics in Payroll Outsourcing

Processing a payroll is complicated, error-prone, and time-consuming. According to the law, business owners are required to withhold a certain percentage of their employee's pay amounts or wages to pay their taxes. These payroll tax amounts are not very consistent then, making the task more complicated. These amounts can change depending on the status of the employee. Also, to make things more complicated government agencies changes amendments and legislation to tax codes in a regular basis. Inaccurate computations and missed deadlines can cost the company costly penalties and fines. Thus, having an outsourced payroll negates all these risks and causes of stress.

Service providers provide solutions to all of these complications. If the business is struggling in performing the payroll process, hiring a service company is the best way to escape this problem. These companies are experts in important payroll activities such as distributing funds to employees' accounts, calculating employee tax, and job cost reporting. Service providers will now take responsibility on calculating employee withholding amounts, providing important and updated forms, and processing payments before due dates. Some of these employees open an accessible online account for employees thus, eliminating the need of gathering and collecting receipts and pay stubs.

Providing the company with an outsourced payroll will not be an easy find. Business operators need to have knowledge the terms of trade, know the needs of the company, how outsourcing benefits the business, and other benefits that may fit the company's needs and solves the company's problems before they can begin finding one. These basic outsourcing services can be used as reference on their decisions. If the business operators can not maintain a balance of their resources, they can begin to consider payroll outsourcing companies. In running a business, every decision made must always be worth it.

Why Bookkeeping Should Be Outsourced

Every business, irrespective of their nature and size, consider bookkeeping as an essential part. In fact, acquiring basic skills in bookkeeping is highly recommended before starting up a business. During startup, money matters are very crucial; proper bookkeeping determines the sink or swim scenario of your business. The growth of your business increases the responsibility of the task.Thus, you may experience complications and certain difficulties especially on keeping track to other important activities of your business. Neglecting this task should never be in the minds of any business owner. Therefore, payroll service companies are more than willing to help your company eliminate heavy and time-consuming tasks associating payroll.

Primarily, business owners outsource the services of bookkeeping due to the lack of knowledge in bookkeeping skills and time to perform demanding activities. There are also many reasons why business operators find outsourcing to be necessary. These reasons include:

  • Time for focusing more on the primary activities of the business: This is considered to be the major reason why business operators outsource their bookkeeping tasks. With all the payroll preparations eliminated, your time will be more on the dedication to important business activities. Moreover, you will also gain more time to relax because you do not have to bother the extra workload that payroll management requires.
  • Management efficiency: You can now eliminate cost and complications associated with training new full-time bookkeepers. There will be less job descriptions to identify since all of your employees are now working only for business related transactions. Through outsourcing bookkeeping, your interest is only on the accounting company's delivery.
  • Better use of available resources: If you prepare with an in-house bookkeeper, you will be required to have extra space, hardware and software. However, when you outsource the services, the resources needed to buy these expensive equipment can now be used to other essential activities of your business.

Bookkeeping requires require a lot of resources that can cost you more time and money. However, this activity should not be disregarded and taken for granted. Fortunately, payroll service companies are now available to outsource your needs.

Using An Umbrella Company To Your Advantage

Working as a self-employed professional can be difficult as there are many complications that just do not exist when working as an employee. However, it is possible for contractors to become employees under an umbrella company and there before remove the difficulties associated with self-employment while retaining the flexibility of contracting. How umbrella companies work…

Working as a self-employed professional can be difficult as there are many complications that just do not exist when working as an employee. However, it is possible for contractors to become employees under an umbrella company and there before remove the difficulties associated with self-employment while retaining the flexibility of contracting.

How umbrella companies work
An umbrella company is effectively a stand in employer for contractors. It employs contractors and in doing so simultaneously takes on all administration for the contractor and processes their payments, or in other words, pays them a wage. For its services, an umbrella company takes a fee which is deducted before the contractor is paid their wages. The contractor does not work for their client directly but rather they provide their services through the umbrella company. In some cases, the contractor will use an agency to source clients rather than sourcing them themselves. In this scenario, the client will pay the agency which will pay the company for the contractor's services after deducting their own fee.

Tax
As the worker is paid a salary by the company, income tax is deducted from the wages in the normal way through Pay As You Earn (PAYE). This is done automatically by the company, which also deductions National Insurance before paying the worker. Therefore, the money received by the contractor is their end pay after tax. In terms of reducing tax, for self-employed individuals who find themselves in a higher tax bracket, using an umbrella company can lessen their outgoings for tax as they would then pay tax via PAYE as an employee.

Expenses
A contractor can claim appropriate expenses when working through an umbrella company. This can minimize the amount of tax the contractor pays as the expenses due are paid to the contractor separately from their salary and are therefore not affected by income tax. This is not a way of cheating the system and avoiding compulsory tax; all expense claims must be legitimate in the eyes of the law, something which these companies are very careful about. Allowable expenses refer to any necessary expenses incurred by the contractor to perform their duties and can include things such as travel, food and drink, training and accommodation. Working through such a company makes this whole process much easier for the contractor who sincerely submits all receipts and details of any expenses incurred to the umbrella company who then pays these expenses to the contractor alongside their salary.

Umbrella companies offer contractors security and flexibility and remove all the hassles which self-employment is notorious for. As any contractor will know, it can be very stressful ensuring that you are completely tax compliant and mistakes, although honest, are not lightly light and can incur devastating financial penalties. This type of company takes on the responsibility for the contractor thenby giving them peace of mind that they are minimizing the amount of tax they pay but legitimately and legally. They will also chase up payments from clients on your behalf as you are paid by the company rather than the client. Usually, all details can be changed very easily and contractors can submit their timesheets and expenses information online. You can also set up a contribution pension scheme as a contractor working for an umbrella company.

Payroll Processing Guide for Small Businesses

Importance of Payroll Processing: Payroll processing is one of the most important tasks in any business, and in simple language it stands for the total sum of money given by an employer to its jobholder in a certain amount of time. One of the most important parts of this process is levy, and levy means…

Importance of Payroll Processing:

Payroll processing is one of the most important tasks in any business, and in simple language it stands for the total sum of money given by an employer to its jobholder in a certain amount of time. One of the most important parts of this process is levy, and levy means that any tax Impose by the government on a jobholder's income and other allowances. It is compulsory for a company to address and pay levy to the appropriate department on time. Payroll processing covers two important areas: Payroll Administration and Payroll Accounting.

What We Meant By Payroll Administration:

It works with an executive of jobholder's personnel and payroll details and compliance with state and local government tax laws.

What We Meant By Payroll Accounting:

It works with the calculation of the money of a company person and the related levies and other deductions, track the results of calculations and preparation for the needive levy recovery.

Payroll for Small Businesses:

A small company commonly has fewer employees as compared with large businesses, and this way anyone can implement the calculations formula easy as pie for small business owners. It needs simple information, since it has a series of steps that should be done each time in order to pay exact money to the employee of a particular business. Small businesses have many ways for completing such task in a simple and an easy way, and while selecting of any accurate technique from the various available methods, it completely depends upon the business requirements and the selection of management.

Old Classical Tactics:

Pen and journal or excel spreadsheet: These are very old management methods, and need lots of attention each and every minute.

An Advantage of Old Tactics:

One of the benefits of old classical tactics is that it gives all the controls to the accountant or management in the complete processing task.

Disadvantages of Old Tactics:

The drawbacks of the old techniques include pen, pencil, scale, and paper etc. These things are annoying and too much time taking, possibilities of data lost and mistakes in adding and calculating.

The older old method can be favorable for new or very small businesses where the employers are not more than 15, because in this way they can save the business expense by handling payroll management in a traditional way.

Appoint a Professional Company:

Any small business can save money, time and all the extra efforts by hiring a professional payroll company for completing the entire task. A professional company is normally familiar with all the pros and cons, a business person can remove their work load.

Are Employers Prepared for the Tax Penalties in the Health Care Act?

Get ready for the IRS to play a major role in health care when the Affordable Care Act takes full effect in 2014. The IRS will enforce most of the laws involved in the reform. Their jurisdiction will include collecting taxes, levying penalties, and deciding who gets included in the health-care mandate. One of the…

Get ready for the IRS to play a major role in health care when the Affordable Care Act takes full effect in 2014. The IRS will enforce most of the laws involved in the reform. Their jurisdiction will include collecting taxes, levying penalties, and deciding who gets included in the health-care mandate.

One of the largest changes for employers will be the provision that requires them to pay an excise tax if they do not offer health insurance to employees. To avoid paying this tax, employers will need to understand all the ramifications of this new “play or pay” rule.

Employers that already offer healthcare coverage to their employees may assume the tax will not apply to them. However, the complexity of the rules could cause some to be subject to the tax, even if they offer health insurance to employees. To avoid this income, employers need to get familiar with the rules, review their health insurance policies, and determine the full impact of the regulation on their businesses.

Under the “play or pay” rule, employers have 50 or more full-time employees and do not offer health care coverage will be required to pay an excise tax of $ 2,000 per year, per full-time employee. One key to avoiding the tax is understanding how the IRS defines full-time employee. According to the law, any worker that averages 30 or more hours per week for any month is considered full-time employee. However, there are a number of guidelines to consider when eliminating full-time employees, and employers need to be well-versed in all aspects of this law.

The regulations also require employers to offer coverage to 95% or more of full-time employees. Employers that slip below this threshold will be assessed the full tax even if they offer coverage to a majority of full-time employees.

The tax is assessed on a monthly basis, so it is possible for employers to avoid the tax in some months but not others. The IRS will calculate and assess the tax without self-reporting by employers. As a result, employers will not be able to ignore the rule and its resulting tax.

There are some exemptions to the tax. Factors affecting these exemptions include an employee's decision to purchase or not purchase insurance through a state or federal exchange, and whether an employee's overall household income qualifies them for a credit or subsidy. Because these factors are beyond their control, employers should not count on qualifying for an exemption. To avoid the excise tax, employers need to understand the IRS 'rules, especially in regards to what constitutes a full-time employee.

Employers may choose to simply terminate health coverage and pay the excise tax. However, they should carefully consider the financial and work ramifications before embarking on such an approach. For example, tax payments may not be taken as a deduction on the company's income tax return .

Some employers may downplay their tax risks because the basic rules seem simple. However, the risks associated with falling into the 95% threshold trap are too great to take chances. We strongly recommend that employers study the rules and implement the proper administrative procedures to stay in compliance with the law. Otherwise, they can end up paying significant penalties that they did not think would apply to their company.

What Are the Advantages of Payroll Outsourcing?

The most important thing for any organization is its employees; a company has to make its staff content in order to remain effective, fruitful, and harmonious. But, when problems arise, the connection between the human resources and employer can rapidly break up. This is the why numerous companies outsource their payrolls to shun problems in…

The most important thing for any organization is its employees; a company has to make its staff content in order to remain effective, fruitful, and harmonious. But, when problems arise, the connection between the human resources and employer can rapidly break up. This is the why numerous companies outsource their payrolls to shun problems in giving salies.

Your company can take advantage of such service providers. However, if you are busy in creating and marketing your products and other matters of your business, but, if you have hired a service, you do not have to be about your invoice.

Nowadays, many organizations are outsourcing this task, so they can concentrate on other matters of their businesses. In this article, we will talk about some advantages of payroll outsourcing. Have a look:

Payroll Software:

To manage your payroll, you do not have to pay for costly softwares. This will save your time and money in establishing and maintaining it. You can make your own software for your accounting procedures. You will be able to save your money on expensive updates of the software as the service will do it for you.

Save Your Time:

On every pay day, human resources spend nearly ten hours in doing this work. If you use services of any company, your employees can save their time, and use it in some other work of your company which is good for you.

Paper Check or Direct Deposit Options:

You have a choice to select between direct deposit and paper check to pay your staff. Whatever decision you make, legislative taxes andholdings are handled by the firm you hire.

Tax Rules:

When you create it on your own, it may be annoying to use the changing tax set of laws. If you hire a service, they will adjust the tax rates. If they make any error, they will pay for it. You do not have to worry about it.

A Few Helpful Services:

You should not hire anyone, especially to do this task, when you have hired a service. The service will also deal with reassigning tasks, unemployment insurance, and layoffs. In this way you can focus on other things of your organization.

Self Submission of Payroll Statistics:

Often, such services depend on softwares; human resources have to submit their working hours for verification. The staff will utilize an electronic card on the provider's website in order to record their working hours. When they do it, their manager check out their records, and approve the correct time card for payment. In case the manager is not available on their payday, the human resources will get the salary anyway. This is the largest benefit of self submissions of payroll data by the staff.

I hope after reading the above-mentioned information, you are now aware of the numerous advantages of the payroll outsourcing. There are some more benefits, but I mentioned a few of them which I liked the most. If you want to learn more on this topic, you can easily find more information on the internet.

Payroll Program – Improve Efficiency and Reduce Costs

A payroll program is necessary for the management of employee information, hours worked and all of the associated necessary information required by payroll and paying your employees. A basic payroll program may meet most of your needs at the start, but as time goes on and you grow, there will be areas that need to…

A payroll program is necessary for the management of employee information, hours worked and all of the associated necessary information required by payroll and paying your employees.

A basic payroll program may meet most of your needs at the start, but as time goes on and you grow, there will be areas that need to change along with your business. As a business changes and continues to drive for more efficiency and cost reduction, there are a number of areas to consider in your payroll program to make improvements. Consider payroll features that can decrease staff resources and reduce the costs of paper, printing, check stock, envelopes and postage.

Payroll program capabilities that the help improve efficiency and reduce costs:

Direct Deposit Payment

Transfer pay electronically to employee bank accounts, rather than issued printed checks.

Publish Pay Advices

Distribute direct deposit pay advices electronically, rather than printing on paper and handing them out.

Electronic / e-Filing of State and Federal Reports

File tax forms and reports electronically via the internet instead of purchasing all the associated materials, printing and sending them.

Time Clock / Time Capture Device Import

Import employee time from a time clock / time capture device electronically, rather than entering the information by hand.

Leave Calculation and Reporting

Maintain accrual, payment and reporting of vacation, sick leave, and PTO with the ability to print accrued, used and remaining on employee pay stubs.

Local Tax Tracking

Set up and track local taxes or tax groups, rather than keeping track of that often complex information in a spreadsheet.

Multiple State Tax Tracking

Track and pay taxes in multiple states, and track tax requirements for mobile employees working in multiple states.

Benefit / Deduction Tracking

Track benefits such as 401K, cafeteria plan, and other benefits / obligations and employer matches within your payroll program rather than using an external spreadsheet.

Wage Garnishment

Wage garnishment can be complex, depending on many factors. Track and pay complex wage garnishments in your payroll system. If your program can not do it, you will need to manually calculate every payday and enter it into the system.

Many businesses that are outgrowing their payroll program or seeking time and cost-savings contact Red Wing Software, seeking a better way to handle their growing payroll needs. CenterPoint Payroll Software is an in-house payroll software program that can accommodate all of these functions and many more. Check it out to to improve payroll efficiency and reduce your costs.