Both PEOs and automated payroll services can help improve your payroll processing; however, they both work in different ways to achieve this. Let’s take a deeper look into these two options to help you discover which would be the best choice for your business.
What is a PEO?
PEO is short for a professional employer organization; this service offers payroll administration support, employee benefits, workers compensation insurance, and additional HR services. PEO’s offer a co-employer relationship, in which the PEO acts as the administrative employer and the client works as the onsite employer. The most notable benefit of this relationship is that they share responsibility for risk, ensuring you are in full compliance at all times.
When you begin working with a PEO, you’ll sign an agreement to give them authority to file all of your taxes under their own EIN. This gives smaller companies access to large company benefits such as lower state unemployment tax, lower worker compensation rates, and access to employee benefits most companies could not obtain on their own. You are entirely in control of the daily activities within your business and the management of your team. When it comes to choosing the right solution for your business, you’ll want to consider the size of your business and whether you need any additional HR help. If you only have a small in-house HR team or need HR assistance, you may find a PEO to be a good option. Learn about co-employment services through MBS here.
What is an Automated Payroll Service?
On the other hand, an automated payroll service will automatically process your payroll, employee deductions, and file all payroll taxes on your behalf. They’ll be able to provide your quarterly and end-of-year tax statements for both the company and your employees. This service makes it easy to pay all of your employees, including those who only work part-time or freelancers. They aim to take the stress away from your team so you can focus on your business.
These services offer various features, including payroll processing, paying your payroll taxes, payroll reporting, and new-hire reporting. On top of this, you may find they offer PTO management, timekeeping, 401k administration, and pay by pay workers compensation. Find out more about payroll services through MBS here.
Using a PEO or automated payroll service is a good solution for any business looking to save time and money instead of processing payroll in-house. Contact us to learn more about options for payroll and co-employment for your business.