Does a PEO help with the HR Payroll company strategy?

The term payroll has been used in different ways, sometimes it refers to the money that is paid to employees who receive a salary for the work they do and It can also refer to the department that manages payroll or the software that is used to process all activities related to this area, the last one is the most common and is an essential part of every organization.

It’s not very common to read payroll and strategy in a single sentence, actually most of the time payroll is just considered a back office support function to make sure employees are paid accurately and on time, but nowadays companies of different sizes know there must be a change. 

Does a PEO help with the HR Payroll company strategy?

Strategic means using different insights in order to make better decisions, it’s about using the data to help in important business decisions so, having a PEO as a partner means you will be checking out and pulling the data and after that you´ll have a better idea at the time you need to give an answer to questions like which are the best profiles, performance, retention and careers evolution.  

The fact is payroll can provide a lot of value to organizations, delivering meaningful operational statistics and identifying actionable trends, also delivering key business information.

You might be interested in: Payroll taxes: 4 basic things you need to understand

Examples of strategic actions organizations can make

1 | If the company is looking for expansion and more collaborators, the right payroll data can provide good information about the cost of the new workforce, information about different salaries needed and if it’s sustainable over the time.  

2 | With HR and payroll working together you can get accurate salary projections (compensations ranges and trends).

3 | Analyzing data the right way can help us have a clear scenario so you know if you need to hire new staff or not in the near future. On the other hand, you can predict employees reaching burnout levels, among other projections.

5 | Maximice reporting capabilities to improve the company payroll process. Payroll strategy decisions can be driven by understanding how your organization’s payroll process measures activities, which are the main metrics considered and more.

Working with a PEO means you can spend extra time and resources on compliance. HR Payroll professionals don’t have to worry about keeping up with all HR actions throughout the day, like payroll management, taxes or other activities.

Midtown HR is focused on simple solutions for payroll and taxes, propose benefits that really feel like benefits, keep up with employment law and also help protect your team, ¡Let’s talk!

Payroll taxes: 4 basic things you need to understand

In simple and brief words payroll taxes are those that employees and employers must pay based on wages and salaries paid to employees. The employee pays part of these taxes through a payroll deduction, and the employer pays the rest. 

Basically these taxes are used to finance social insurance programs like medicare and social security. Payroll mistakes are common, at the same time it’s an area where companies don’t want to make them. Let’s check out why MidtownHR assigns every client a dedicated payroll specialist, as the single point person for different important activities related to payroll. 

4 basic things you need to understand about payroll activities

Taxes and risk mitigation

Risk management is an important component of running a business. Partnering with a PEO can help ensure you have all potential risks covered. 

For instance, if you work with Midtown HR as your co-employer, we submit all taxes on your behalf under our federal ID. This relieves you of both the risks and responsibilities of properly tracking and meeting your quarterly tax obligations.

Time and attendance

With this option it’s possible to manage alerts and reporting that can help improve absenteeism and help safeguard against wage and hourly lawsuits that implement timekeeping rules which are compliant with wage and hours laws.

So one online time-tracking portal for hourly workers that gives both employees and management instant clarity about time worked and money earned would be an advantage for the whole organization.

You can also read: What is a professional employer organization (PEO) and how does it help my company?

Employee payroll platform

A system that handles payroll services including payroll taxes, compensation, benefits management and also organizes employee records it is a tool or a resource you would like to leverage.

Streamline payroll and go paperless with PEOs online platform. It lets workers self-manage their tax elections, download pay stubs, track PTO, set up direct deposit rules, submit digital tax documents and more.

Reporting

Create a range of useful reports on salaries, taxes, paid time off, employee hours and more. Accurate reports are essential for compliance, budget planning and accountability across your organization.

What’s the difference between employee and employer payroll taxes?

As said before, payroll taxes are paid by both employees and employers, but there’s one big difference, which is that payroll taxes paid by employees affect employees’ net pay, but payroll taxes paid by employers don’t.

Taxes that employees pay are subtracted out of an employee’s gross pay, which lowers the net pay for that paycheck, on the other hand payroll taxes paid by the employer do not affect an employee’s paycheck. 

MidtownHR can help your company with simple solutions for payroll and taxes, propose benefits that really feel like benefits, keep up with employment law and also help protect your team. MidtownHR is on a mission to create a world of optimistic entrepreneurs.