The backbone of economic growth in the United States is the success of small businesses. Typically, this means businesses with between five and 100 employees, which is the range of companies served by the many PEOs in NetPEO’s nationwide network. For some small business owners, payroll may be a hassle. Entrepreneurs tend to start companies due to their passion for their industries and not to spend hours poring over complicated paperwork. PEOs can take care of these issues by providing payroll management services in a variety of ways.
Payroll Management Services
Of course, the first and most important way that a PEO can handle a company’s payroll is by distributing checks, monitoring work time, and keeping the company’s accounting books current with expenses and income. There are a few other ways that our PEOs can help as well.
Administering Employee Benefits Packages
Just as dealing with payroll and work hours can be a hassle, it can be difficult to keep track of employee benefits like paid time off, vacation time, and more. The experts at a PEO can use advanced software to keep track of these items and administer them when needed.
Additionally, the mere act of partnering with a PEO often means that the client company’s employees receive better benefits at lower individual costs. This is because working with a PEO involves the co-employment arrangement, whereby the PEO can include the client company’s employees when calculating their total employees. Since PEOs work with many businesses, co-employment deepens their employee pool and allows them to access top-tier benefits and spread the cost across more workers.
Many PEOs offer online access portals to employers as a method of allowing hands-on business owners a way to properly manage their own payroll. For example, an online portal may allow employers to view and print off pay stubs, track worked hours, access spreadsheets of payments and wage garnishments, and more. This is ideal for employers who have the desire to handle their own payroll but lack the software.
The flip side of online portals is the employee-self-service portal. While employers can view these, they are designed for employees to be able to keep track of their pay, sick days, vacation hours, PTO, and other important factors. Giving this increased access to such information can give them more flexibility with scheduling and lead to happier, long-lasting employees rather than costly employee turnover.
How PEOs Are Able to Handle Payroll Matters
Rather than sending HR workers to the client company on a temporary basis, such as in employee leasing, PEOs are able to provide HR and accounting services through the co-employment arrangement. While the idea of allowing another entity to become a co-employer of your employees may sound risky to a business owner, in fact, there is no elevated risk or liability associated with the co-employment relationship. On the contrary, the relationship is a legal setup that allows the PEO to provide necessary services that actually can lower a client company’s overall risk profile. Here is how co-employment works.
The Role of the Business Owner
In the co-employment relationship, the business owner retains all of their control over their company. They have the final say regarding hiring and firing decisions; they dictate the direction of their business and corporate culture; they are still the primary employer of their employees. They do not lose any rights or privileges through co-employment.
The Role of the PEO
The PEO gains the ability to consider the client business owner’s employees as part of their employee pool. This allows the PEO to handle sensitive information and perform services that are reserved for employers in most situations, such as payroll management and benefits administration. In all matters, the PEO respects the authority of the business owner and defers to their wishes regarding hiring and firing as well as the direction of the company.
Paying for a PEO
One reason that PEOs have become popular, serving about 15% of small businesses according to the latest data, is because outsourcing HR needs in this way is much less expensive than hiring a full-time, in-house accounting and HR team. Typically, payment is arranged in one of two ways.
- Flat rate per employee each month: useful for businesses with few employees and high wages
- Percentage of payroll: useful for companies with more numerous employees on lower wages
PEOs often allow clients to select which payment method best suits their company, maximizing the savings.
Have a Skilled PEO Handle Your Payroll Today
If you are a small business owner looking for a PEO to help with the seemingly endless number-crunching and paperwork of payroll management, get in touch with NetPEO today. Our nationwide network of PEOs has two centuries of combined industry experience, so you know that you will find a PEO that is right for your business.
NetPEO offers a FREE, no-obligation quote on our services, matches you with several in-network PEOs based on an extensive profile of your needs, and allows you to select the one with which you are most comfortable. Call us today at (678) 376-1212, or fill out the form on our contact page to start saving time and money on your payroll management services this year.