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Loading . . .Tax credits vary from state to state, and from industry to industry. Do you know when to involve your CPA or tax preparation vendor? When do you involve your HR people? It's easy to make sure you're claiming as many of the credits your company qualifies for--hire a professional.
The WOTC tax credit can save you up to $9000 per year for each qualified new hire you make. So why aren't you taking advantage of it? Here's a few things to consider when you decide whether you want to manage it internally or outsource it.
What should you consider when looking for a tax credit services provider. There is no substitute for track record and testimonials. And since there are only a few things that will sink your business faster than a bunch of IRS fines, penalties and liens, your provider's first priority should be to protect your business.
If you hire a lot of new hourly employees each year, it probably makes sense to outsource your tax credit management. But if you only hire a few people, it can be a smarter financial move to handle it yourself--just know that there's a learning curve, and you need to be very organized.
If you're looking for a company to help you maximize the number of tax credits you claim, and minimize your tax burden, here's a few pointers you might think about.
According to a report by the industry publication HRO Today, HROs average price for services is around $600 to $800 per employee, per year.
Outsourcing payroll processing – or any HR function – is a question of cost and quality. An outsourced HR service should cost less than it would if you were handling it in house – if it doesn’t, you shouldn’t use it.
Most companies are not human resources experts. Payroll is a specialized business function, like advertising or finance, that everyone isn’t going to be good at. So, any company can potentially take advantage of a payroll processing service. Smaller companies in particular will likely lack the expertise to handle payroll inexpensively. Outsourcing payroll processing allows a firm to focus more on improving its own business.
ADP, Intuit, Ceridian and Paychex are the best known of the large payroll processing services operating in the US. The four together represent about 25 percent of all employee payroll processed in the US. Beyond these four, though, the market is deeply fragmented, with small and local firms handling payroll processing for millions of small businesses.
A good payroll processing service will also be able to give you a reasonable snapshot of your personnel issues at any one time, and chart trends, both by using your payroll data and possibly by aggregating that data with that of similar companies.