Did you know that there are 33.2 million small businesses in the US?
Even though these numbers might make you feel like you’re in a crowd, they are good. This means that your business idea has room to grow.
As you plan for growth and success, you will find gaps in handling your workforce. You can hire a one-on-one payroll service provider, but a managed service company partner has its benefits.
Here are some things to think about when picking. Continue reading to find out!
Co-employment Relationship
A Payments Service Provider (PSP) assists a PEO or full-service CR with payments. This link can benefit organizations wanting access to higher-level payroll procedures and information they couldn’t manage.
PEOs handle everything from workers’ compensation to health insurance. PEOs offer more services and need more effort from employers.
A payroll service company elevates payroll processes by providing duty-of-care reporting, flexible payment methods, analytics, and accurate reporting. PEOs offer more services than PSPs, which focus on payments.
Employer of Record
Most of the time, PEOs offer a more comprehensive range of HR services, such as filing taxes and ensuring each employee has health insurance. They also take on the risk of certain HR and payroll methods.
Payments companies only do things that have to do with payments, like check wages, figure out taxes, and make pay stubs. Payroll Service Providers are generally cheaper than PEOs, even though they can’t help with employee rules or other HR tasks.
For more information about PEO insurance, read guide to PEO policies.
Risk Management
PEOs offer more services than PSPs when it comes to risk management. They can help with HR and compliance and give you debit cards for completing payroll.
They are very attractive to companies that want to limit their risk because they take on the responsibility of payroll deductions. PEOs also know a lot about workers’ compensation and other types of insurance that businesses need to protect themselves.
PSPs offer a smaller range of services and must be ready to manage payment risks. PSPs can help with basic salary deductions, but they tend to focus more on being reactive than on being proactive.
Employee Benefits
Payroll Service Providers (PSP) and Professional Employer Organizations (PEO) are two companies that help businesses with employee perks and services. PSPs offer payroll-related services, such as organizing, calculating, and cutting paychecks.
PEOs are much more all-inclusive, giving access to full benefits like health, dental, short-term disability, life insurance, 401(k) plans, liability coverage, safety compliance, drug tests, and more. PSPs can take care of all your accounting needs in one place.
PEOs take a more comprehensive approach because they handle day-to-day HR tasks and understand how a payroll company works and what makes it tick.
Benefits of Payroll Service Provider
Employers with a lot of workers and complicated HR services should use a PEO to run payroll in-house. A payroll service provider is good for small businesses that only need payroll services and don’t have a lot of workers. Choose the best choice for you and your business, no matter what you decide.
