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| Typical costs: | - A basic payroll service averages $0.80-$2.00 per check, plus a base account fee which varies depending on the frequency of payroll periods, while options such as tax filing and direct deposit can add $4-$9 per payroll period, according to Entrepreneur.com. For example, a Northern California retail store with two locations and 12 employees pays about $80 a month to a CompuPay franchisee for issuing twice-monthly paychecks as well as calculating and filing all monthly, quarterly and annual state and federal payroll tax forms.
- For $14.95-$59 a month (some subscriptions must be paid a year at a time), Intuit provides online payroll services with updated tax tables that work with its QuickBooks accounting software.
- Bank of America's Business 24/7 program provides free online payroll services if all payments go into BOA accounts.
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| What should be included: | - The trickiest part of issuing paychecks is determining the correct tax deductions. Payroll services take data on the hours worked by each employee to calculate all relevant deductions and tax withholding, then issue paychecks. Employees hours' worked can usually be submitted by phone, fax or e-mail. Payroll companies will sign checks, then mail them to you, or send them electronically so you can print them out. A service will also deposit paychecks electronically into employees' accounts, as well as calculating and filing all required tax forms. < www.allbusiness.com/human-resources/compensation-payroll/413-1.html>AllBusiness.com outlines the benefits of using a payroll service.
- Your independent accountant or bookkeeper might be willing to also handle your payroll needs, but most won't take on this highly detailed and time-consuming task because payroll services are usually faster and cheaper.
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| Additional costs: | - Be sure you're clear on the costs of additional services. There can be fees for adding or dropping employees, adjusting employee information or setting up your account, and these vary widely between payroll services.
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| Shopping for payroll service: | - The market is highly competitive; pricing should be relatively negotiable. To avoid unnecessary charges, figure out in advance which features you really need.
- BusinessWeek.com offers tips for choosing a service.
- Two of the major companies are ADP and PayChex.
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Article updated November 2006 |
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