Payroll processing is a challenging job and should be done only by trained professionals. Hiring such professionals for small companies can be a daunting task. Many a time, small business owners choose to manage the payroll processing all on their own. That is not quite the smart thing to do, as cruising through the complex payroll landscape is not easy. That too without any professional help.
What makes payroll processing complicated?
Taxes, insurance, and statutory compliances can make payroll quite complicated. Yes, there are payroll software systems that help manage the situation to a great extent. But if your business requires holistic payroll management, it is best to go ahead with PEO payroll providers.
What kind of information does a PEO service provider require for accurate payroll processing?
- The unique identity number of the business and a tax ID number, if any.
- Personal details of every employee in the organization.
- The salary details of each employee so that the tax computation can be done accordingly.
- Mandatory deductions that need to be done before the paycheck day. There are several voluntary deductions, too, about which each employee needs to inform the employer.
PEO Payroll is when an organization hires PEO services only for payroll. Organizations that offer such services are known as PEO payroll providers. Some of the factors that apply in this case are:
- The PEO assumes the role of a co-employer for payroll processing.
- The PEO manages the payroll administration and tax-related aspects
- The PEO service providers use their tax IDs to process payroll rather than use the clients.
The specific tasks include:
- Payment of salaries and wages
- Depositing taxes
- Helping with tax filing and return filings
The PEO service provider takes care of the payroll admin of full-time employees, part-time employees, contractors, and vendors. While the day-to-day operations of the HR department are still in your hands, the payroll part is completely managed and overseen by the outsourced PEO service provider.
Difference between PEO payroll services and standard payroll services?
A well-reputed PEO payroll service provider ensures accuracy and speed in payroll processing. There are numerous differences between a standard and a PEO payroll provider.
- The PEO provider in this works as your Employer of Record, while with the standard service provider, the business remains the employer of record.
- When a standard payroll provider is involved, the responsibilities and compliance lie with the employers while there are shared liabilities in the case of PEOs.
- The paperwork related to compensation and taxation must be done by the employer when hiring a standard service provider. In the case of a PEO payroll provider, the entire responsibility lies with the PEO.
Hiring established global PEO services in India is critically important if you wish to start your business on the right note in the country. The Labor laws of India are quite complicated. To add to it, there are multiple statutory compliances and taxation-related aspects. With the help of a global PEO service provider, the gamut can be traversed smoothly.