National Payroll Week 2024: All About PEO Payroll Services

Quick look: It’s National Payroll Week, an important time to honor payroll professionals’ work to keep the country operating smoothly! Getting paid wouldn’t be possible without the people who make it happen, and this observance raises awareness of the crucial role these experts play in the accurate and timely payment of workers. Here, we explore the importance of payroll, how PEO payroll services impact SMBs across the country, and all the other ways PEOs help businesses, too.

Each year after Labor Day, the American Payroll Association (APA) hosts National Payroll Week (NPW) to celebrate the hard work of the country’s approximately 160 million wage earners and the payroll professionals who pay them.

According to the official website, National Payroll Week “highlights the achievements and partnerships between America’s employees, payroll professionals, and various government programs and agencies. During NPW, PayrollOrg celebrates payday and honors and celebrates the hard work and dedication of America’s workers and the payroll professionals who ensure paychecks are accurate and on-time for millions of employees.”

NPW’s official slogan is “America Works Because We’re Working for America®.” This phrase summarizes that the funds payroll professionals withhold from employees are crucial to the successful operation of government programs like Medicare, federal highway building and maintenance, social security, the military, and more. Through payroll withholding, these experts contribute, collect, report, and deposit 70% of the U.S. Treasury’s annual revenue!

For those looking to learn more about their paycheck, National Payroll Week’s resource center is full of tools, including an IRS tax withholding estimator, a paycheck calculator, a 401(k) calculator, and resources on social security benefits, direct deposit, employee work eligibility, child support, and paycheck management.

Looking for ways to celebrate National Payroll Week in your organization? Consider the following six ideas provided by the APA:

1. Host a direct deposit drive or information booth to educate staff on their paychecks, benefits, W-4 Forms, etc. These tips can help them make the most of their hard-earned wages.
2. Take the “Getting Paid In America” survey (explore last year’s survey results here)
3. Sign your business up to be an official NPW supporter (it’s free!)
4. Decorate your company’s payroll department with NPW merchandise
5. Plan an NPW party with games, quizzes, PAYDAY candy bars, and more.
6. Take photos and show appreciation for your payroll team (and NPW) through companywide emails and/or social media posts

PEO payroll services vs. payroll service providers: what’s the difference?

Payroll is a necessary function, and small- and medium-sized businesses (SMBs) can process it in several ways. Some SMBs manage payroll in-house, which can sometimes place additional demands on their resources. Other companies offload their payroll responsibilities to a payroll service provider or a professional employer organization (PEO).

But with both business types capable of processing payroll, what makes them different, and how do you know which is the best fit for your organization?

Payroll at a PEO

Two main factors set PEO payroll services apart from a payroll service provider: the breadth of their services and their shared legal responsibility with you. Some PEOs, like ExtensisHR, are IRS-Certified. An IRS Certified PEO (CPEO) is a PEO that routinely passes strict audits and must maintain tax compliance, rigorous financial standards, and routine background checks to uphold their certification.

The most significant difference between a certified PEO and a non-certified PEO involves financial assurance and peace of mind for SMBs. When working with a non-certified PEO, the IRS views that both the PEO and the SMB are jointly liable for the payment of payroll taxes. However, the IRS views a CPEO as solely liable for employment tax payments.

In addition to providing payroll administration and compliance support, PEOs offer SMBs a variety of other human resources (HR) services, including dedicated account management and:

• HR guidance
• Benefits administration and management
• Risk and compliance services with expertise in state unemployment, workers’ compensation, risk management and workplace safety, among other critical areas
• Comprehensive recruiting services
• And more

PEOs can also help SMBs lower their overall costs using economies of scale that can allow companies to secure better employee benefits at potentially better prices. Businesses that partner with a PEO will likely experience time savings, too, as they can offload as many HR tasks as needed.

One final characteristic that distinguishes a PEO from a payroll service provider is that, as the employer of record (EOR), they share legal responsibility with their customers. This means they are motivated to protect and minimize risks to your business.

Payroll at a payroll service provider

Like PEOs, payroll service providers can, you guessed it, process payroll. However, most payroll service providers only handle payroll administration and compliance and provide no additional HR services.

Also, payroll service providers typically don’t have dedicated customer service. Oftentimes, if an employee needs support, they must contact their employer, who must then contact the payroll service provider.

And as payroll service providers do not share a legal responsibility with you, you will be the only party to bear the burden if a mistake occurs with your payroll taxes. Because of this, partnering with a payroll service provider doesn’t necessarily minimize your business risk or lessen your compliance concerns.

Which one is right for you?

While some payroll service providers may appear to have a lower price tag at first glance, it’s important to consider the big picture, potential long-term cost savings, and total cost of ownership.

A payroll service provider could be adequate if your organization simply needs payroll processing. But in a tight labor market and times of economic uncertainty, PEOs may provide greater overall value through their competitively priced benefits plans, ability to manage HR and recruiting on your behalf, and their stake in minimizing your business’ risk and ensuring its compliance.

Payroll, HR, and more—under one roof

Each business has unique needs, but partnering with a PEO to manage payroll (and more) makes the most sense for many.

A CPEO, like ExtensisHR, provides a total payroll solution, including:

• Payroll processing
• Paid time off (PTO) set up
• Distribution of checks, direct deposit, and payday cards
• Payroll tax processing, compliance, and auditing

Unlike many payroll service providers, ExtensisHR provides other services, including HR guidance, benefits administration and management, recruiting services (at no additional cost), and risk and compliance expertise… all with a single point of contact service team.

ExtensisHR’s Work Anywhere® platform ties it all together by enabling SMB leaders to securely manage HR tasks like downloading paystubs, enrolling in employee benefits, connecting with customer support, and more—from anywhere, at any time.

It’s National Payroll Week, but ExtensisHR’s PEO payroll services simplify every aspect of HR all year long. Learn more about our payroll solutions or contact our experts today to get started!