Payroll taxes and the administrative commitment needed to manage them are a necessary part of running your staffing agency. Firms can find themselves burdened with the many obligations required just to stay compliant and still know that they’re just one misstep away from a tax levy.
As the employer of record, you’re required to file federal payroll taxes, including federal unemployment, Social Security, Medicare, and withholding in any states where your employees worked during the course of a year.
Those taxes, then, need to be deposited with the proper tax agencies. Some states require that payments be made electronically. That means knowing not only the due dates in specific states for specific taxes, but also the specific method of payment each state requires.
Additionally, before the end of every January, you’ll need to provide each employee with a W-2, and then maintain those records and the documentation supporting them for at least four to seven years.
Keep the auditor at bay
Keeping up with state and federal payroll taxes and the methods for paying them is complicated, especially if you’ve got temporary workers deployed in multiple states. It means allocating the hours and resources needed to research federal and local payroll laws to ensure you remain in compliance and avoid penalties and lawsuits that could negatively affect your bottom line.
Some agencies are understaffed and just can’t afford to have more than one person manage payroll duties. In that case, working with a payroll funding company — whose core competencies are exactly that — can make life a lot easier.
Outsourcing the responsibility of payroll tax administration to a full-service funding company mitigates, or eliminates, the costs and audit risks that can strike agencies failing to manage these taxes. It also brings peace of mind knowing that every aspect of your payroll is being handled by an expert.
Control without the hassle
Through this service, virtually all employee and client communication is done in your name, including issuing payroll checks, invoicing clients and making collection calls. The payroll funding company also pays and reports all payroll taxes whenever and wherever they’re due on your behalf, and generates all W-2s in your name. You get control and oversight of the process, while the payroll funding firm handles the work.
Full-service funding brings relief to staffing firms that don’t want the headaches of processing payroll or the hassles of filing payroll tax reports. It lets you do what you do best: interview candidates, sell services, market your firm and grow your business. Full-service payroll funding companies become an administrative branch of your firm — an invisible partner providing the same great service your customers have come to expect while keeping you audit-free.