This type of payroll processing is becoming more and more popular. Gone are the days where employees were skeptical of their employers farming their information to a third party. Even when this service was introduced, it created an enormous benefit to employers but the trust and security was not quite popular. Today, there are numerous added benefits of online payroll that provide an employer with ease of data entry, payroll tax filing, accuracy of deductions, secure offsite recordkeeping, automatically generated payroll and employee reports, elimination of additional overhead costs, trusted confidentiality of sensitive, personal employee information, and once source of information for employees.

Online payroll provides convenience to employers who do not have the personnel to process payroll. This outsourcing function may also be used to reduce personnel and save the company valuable wages that could be used to grow its company in other areas, saving unnecessary overhead. By using an online payroll company, employers eliminate areas of financial vulnerability in federal and state employment tax obligations. While the employer is still responsible for the fees, the payroll company takes care of filing the necessary forms in a timely manner and forwards the necessary information to the employer for filing its quarterly and year-end taxes.

Companies that provide online payroll services offer several features that not only present convenience to the employer, but the employee as well. Once a payroll company has the necessary information from the employer, it is able to automatically calculate each employee’s check from hours entered to proper tax deductions outlined on W-4s to health insurance deductions specific to the employee’s needs (single, married, family, etc.).

The online payroll collects information from the employer on each employee, including but not limited to: name, contact information, social security number, current W-4, insurance coverage and rates, direct deposit preference, and any court-ordered deductions.

There is little to no training necessary for most online payroll systems. Once a payroll company has this information, it is usually quite simple for an employer to either enter by hand the employee time cards or the information can be uploaded, depending on the format the payroll company uses. Today’s software is user-friendly and cuts payroll processing time dramatically. In addition, the recordkeeping cuts down on valuable employer time when the payroll company has automatically generated reports available to the employer at the click of a mouse. All of this while creating a more accurate payroll.

While most information that is directly affected by wages, taxes, and state and federal guidelines, are included in basic services offered by online payroll firms, there are additional features that provide ease and convenience to employers. It is a win-win situation for the employer because the minimal costs and conveniences of outsourcing payroll greatly overshadow the work, time, costs, and effort of performing these lengthy and often problematic tasks in-house.