Account managers at Dallas based BenefitMall frequently find themselves explaining all the costs that go into payroll processing. Above and beyond those costs are payroll taxes that have to be withheld and submitted. Yet those taxes are not necessarily static. From Washington all the way down to Main Street, governments are looking for creative new ways to take more. It seems like nothing is off-limits anymore.
Take the case of business owners in Murray, Kentucky. The city council recently implemented a new payroll tax designed to help keep local government solvent in the midst of an ongoing pension crisis. The newly implemented tax is bad enough, but now the city is assessing a $25 fee for submitting payment.
In other words, employers must pay an additional $25 for the privilege of submitting the 1% payroll tax. Local government says the additional fee is necessary to cover the costs of processing tax payments. Understandably, local business owners are not happy.
Payroll Is Not Cheap
Regardless of your view on local payroll taxes and processing fees, the fact of the matter is that payroll is not cheap. Nearly every business in the country with employees on the payroll say that combined labor and payroll processing costs make up the largest expenditure they incur.
It is understandable that labor costs eat up a sizable portion of revenues. It is also necessary. No business can survive without the dedicated, hard-working people who actually do the work. Employers don’t have a problem with that. But the actual cost to process payroll is another matter.
Processing payroll is, for a lot of companies, a proposition that takes too much time and costs too much money. So many companies are still using legacy systems that are terribly inefficient and prone to mistakes. And guess what? Both inefficiency and mistakes cost more money in the long run.
Yes, it’s a shame that nothing is off limits to government entities that seem to be taking more and more with every passing fiscal year. Yes, it’s unfair that local business owners and their employees are having to foot the bill for out-of-control government pensions. But even if none of those things existed, payroll would still be an expensive proposition.
There Is a Solution
BenefitMall explains that there is a solution to the high cost of payroll processing. That solution is cloud-based payroll. A cloud-based solution takes advantage of the latest technologies to make payroll processing as efficient as possible with minimal errors. Software operating in the cloud can be combined with other technologies, like state-of-the-art digital time clocks, to eliminate time-consuming tasks payroll departments are currently doing manually.
For example, consider a company that transitions to a digital time tracking system that is fully integrated with payroll software. By issuing employees microchip enabled ID cards, the entire process of manual time and attendance tracking is eliminated.
Employees scan their cards when they punch in at the start of the day, and then again when they punch out at the end of their shifts. They do the same thing for their daily lunch breaks. In the background, payroll software takes care of everything else. It records working hours, calculates wages, and insures that every employee gets paid what he or she is due.
There may be nothing that is off-limits to governments intent on taxing businesses as much as possible. But that does not mean business owners have to continue doing payroll the way it was done in the 20th century. Cloud-based payroll solutions, driven by technology, make payroll processing a lot less costly and a lot more efficient.