Quick look: It’s National Payroll Week – an important time to honor the work that payroll professionals do 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 hosts National Payroll Week (NPW) to celebrate the hard work by the country’s nearly 150 million wage earners and the payroll professionals who pay them.
According to the official website, National Payroll Week “highlights the achievements and symbiotic partnerships between America’s employees, payroll professionals, and various government programs and agencies. The American Payroll Association (APA), its local chapters, and others in the payroll industry use the week as a platform to spread awareness of the payroll withholding system, to host community service projects, and to educate others on how paychecks are calculated and how to get the most out of their pay.”
National Payroll Week’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—a whopping $2.4 trillion annually!
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.
If you’re looking for ways to celebrate National Payroll Week in your organization, consider the following 10 ideas provided by the APA:
- Create fun payroll-themed contests
- Share general payroll and National Payroll Week-specific facts with coworkers
- Take the “Getting Paid In America” survey (explore last year’s survey results here)
- Become an official National Payroll Week supporter
- Handout PAYDAY candy bars during the week
- Decorate your company’s payroll department
- Host a companywide lunch that celebrates your payroll team’s hard work
- Create a National Payroll Week area within your office where employees have access to information about payroll
- Host an educational meeting about National Payroll Week, payroll withholdings, and more
- Show appreciation for your payroll team through companywide emails and/or social media posts
Psst, you can also listen to National Payroll Week’s official song, “America Works,” by songwriter Al McCree and Nashville singer Brandon Sandefur.
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 have in-house payroll professionals, which, depending on the organization, may put a strain on 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 things 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. A 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 the 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, a CPEO is viewed solely liable by the IRS 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, and more
- Comprehensive recruiting services
- And more
PEOs can also potentially help SMBs lower their overall costs, as they have economies of scale that can allow companies to secure better benefits at a lower price. 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 of a PEO that stands out 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 reach out to their employer, who then must 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 look at the big picture and potential long-term cost savings and total cost of ownership.
A payroll service provider could be adequate if your organization simply needs payroll to be processed. 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 for many, partnering with a PEO to manage payroll (and much more) makes the most sense.
A CPEO, like ExtensisHR, provides end-to-end payroll services, 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.
And to tie it all together, its Work Anywhere® platform enables 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. Contact our experts today to get started.