The term "payroll services" can refer to either companies that offer services dealing with calculating, distributing and handling taxes for a business payroll, or to those business services themselves. Payroll services and payroll services companies can be attractive options for small businesses that lack the expertise of computing and taxing payroll, and to large companies that hope to realize operational efficiencies by outsourcing. Here are a few of the business services offered as part of payroll services.
Payroll Processing
The first component of payroll services is actually creating paychecks for employees. Payroll services include calculating compensation for all employees, withholding deductions, and printing actual checks or deposit statements.
Tax Computation
Payroll services also encompass the calculation and deduction of the various payroll taxes, including federal income, state income, medicare, social security and other taxes.
Tax Filing
A payroll services partner will also file and pay those taxes for a business, as well as complete all monthly, quarterly and annual payroll tax reports due.
Check Distribution and Direct Deposit
Some payroll services also offer direct deposit for employees, depositing funds directly to employees' banks, and can mail checks to employees or the business itself.
Companies
ADP and Paychex are two of the largest payroll services in the United States, while software packages like Quickbooks and Peachtree offer payroll services as part of their applications.
