Challenging and complicated enough, the filing of payroll taxes, remittance and reporting can be made even trickier when you only have a small team, or employ remote workers.
Tracking, understanding and adhering to all of the tax laws and regulations to avoid penalties and the threat of legal action, is a lot for a small business to handle, and while some companies choose to shoulder the burden themselves with an in-house team, others prefer to outsource their requirements to help them save time and money.
If you’re considering outsourcing your payroll tax needs, here are some important questions to ask service providers:
What are the services that you offer?
There are many different aspects to processing payroll taxes, so it’s important that you make sure your chosen provider can assist you with them all. Try asking them the following questions:
- Can you provide me with an end-to-end automated service, that covers everything related to payroll taxes?
- Will you give me reporting that is both detailed and actionable?
- Do your workflows identify problems and mistakes before they happen, to help minimize the risk of penalties?
How will you protect my data?
With breaches of data becoming increasingly common, handling employee information in such a way that it remains protected at all times, means having robust security protocols in place. Check whether your chosen provider has the following measures and certifications in place to give your sensitive data the protection it needs:
- ISO certification
- SOC 1 Type 2 reports
- SOC 2 Type 2 reports
- Redundancy hardening and testing and regular business continuity
- HIPAA and PCI standard worthy best practices for service and operations
It’s essential that your chosen provider keeps up-to-date with security related technology, so that they can face new threats as they emerge, and protect your business from them.
How will you make sure my company is always compliant?
You’ll want to find out exactly how your chosen payroll tax provider intends to protect you from fines and penalties as a result of non-compliance. Try asking them the following:
- How have you helped help clients avoid IRS penalties and what is your track record?
- Can you give me proof of your regulatory expertise?
- Have you established a relationship with the proper agencies?
Your payroll tax provider should always be able to minimize or eliminate the risk of you being non-compliant, and therefore reduce the risk of fines and penalties.
Can you describe your business model?
Having somebody knowledgeable and experienced to answer your questions whenever you have any, is imperative, so it’s always worth asking them about their service model:
- Do you have dedicated experts who can form a part of your team as and when needed?
- Will any questions that I have be answered swiftly and accurately by telephone or email, for example?
The importance of having help on hand around the clock should never be underestimated, and your chosen provider should always be able to give you this level of support.
What technology do you use?
To perform their role accurately and give you the best results, payroll tax providers should use comprehensive and up-to-date technology. Don’t be afraid to ask them what tech they use:
- For flagging compliance issues and errors, automating calculations, and filing taxes, do you use intelligent analytics?
- Will my system easily integrate with your technology?
- Do you monitor the technology you use, and update it as per any legislative changes?
You have every right to ask as many questions as you like of a potential payroll tax provider, and if you’re not satisfied with any of their answers, you are free to continue your search. When you find the right provider, however, it can make payroll taxes a burden you no longer have to worry about, and aside from saving you time, could help save you money, too.