What are the necessities to operating a business? Do you know? According to www.irs.gov the checklist includes applying for an EIN (Employer ID Number), selecting a business structure, choosing a tax year, getting your employees (if applicable) set up with Form I-9 and Form W-4, and setting up your plan for paying business taxes. These are the basics. If you have employees, you’ll need to keep track of deductions like garnishments, voluntary benefits, etc. The paperwork alone can be a fulltime job.
So do you need a Human Resource Service?
How valuable is your time? Hiring an HR and payroll service gives you time back to spend on your business and keeps you in compliance so there are no surprises down the line. You may also save money. Are you paying the correct amount in taxes?
Taxes are a HUGE money and energy drain. Income tax, federal tax, payroll tax… using a payroll service will assure these are paid on time and the correct amount. Even if you’re the only employee, getting your paycheck through a service means taxes are paid as you go. Payroll taxes are called FICA taxes because they are authorized by the Federal Insurance Contribution Act. Individual workers’ pay half the required amount, a total of 7.65 percent of income; 6.2 percent goes to the nation’s Social Security system, while 1.45 percent goes to Medicare. Self-employed and business owners are liable for the entire 15.3 percent.
Along with payroll and taxes, HR service will keep you up to date with state and federal laws. Any type of mix-up dealing with these issues can cause major legal problems for your business as well as employee dissatisfaction. Most of the time small businesses don’t have the staff, man hours or budget to properly handle the nitty-gritty details of HR. This is a main reason to reach out to an HR service and outsource that need.
As you begin to research, recognize that HR has evolved in the last decade. Beyond employee benefits, ask yourself if your company needs are more strategic and if you’re prepared for growth. Today, many leading-edge entrepreneurs realize that a peak-performing, strategically focused HR operation can generate both savings and profits for the businesses they serve.
The question of why HR services is important is complex. However, understanding the benefits of strategic HR will help guide you in determining when to outsource services to suit your business’ human resources needs.