Payroll | What you need to know

Payroll processing and benefits are another complicated responsibility . Payroll refers specifically to the money that is paid to employees by the company, and is rife with complicated tax deductions and withholdings that have to be executed accurately every time pay is distributed (payroll is another common reason businesses outsource HR).

Offering comprehensive benefits that address the needs of your employees is just as important as good payroll management. A Zenefits survey found that 70% of employees agree that fringe benefits are a major consideration in evaluating future job opportunities.

There are two types of benefits: Those that are required by law and those that are not. We already alluded to required benefits, but the full list includes:

  • Social security tax
  • Workers’ compensation
  • Unemployment insurance
  • COBRA insurance
  • Family & medical leave

Note that there are exceptions to providing these benefits based on the size of your business and the state you are based in.

Additional benefits that are not required by law but are fairly common include:

  • Health insurance (businesses with over 50 employees will have to pay a tax penalty for not offering health insurance)
  • Dental and vision insurance
  • Commuter benefits
  • Paid time off
  • Paid holidays
  • Work from home flexibility
  • 401(k) plans
  • Employee discounts
  • Employee assistance programs
  • De minimis benefits (low-value perks such as free coffee)

Employees typically select their benefits during the onboarding process or open enrollment periods. The process of selecting the benefits to offer to your employees can be fairly involved, and is another reason small business owners opt to outsource their human resources.

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