The 2013 Small Business Taxation Survey was just released by the National Small Business Association (NSBA) in the days leading up to the 2013 April 15th Tax Filing Deadline and Payroll Taxes Ranked #2 in both the Top Administrative and Top Financial Burdens of small businesses.
A note from the forward in the survey...
"When it comes to payroll taxes, one-third of small businesses report spending more than six hours per month on the administration of payroll taxes, which, while it may not sound overly burdensome, amounts to more than 72 hours per year, or nearly two full work weeks."
That's an eye opening amount of valuable time, and the study asked if small business owners were outsourcing payroll in order to reduce their time spent on payroll administration:
40% of the respondents said they "Use a Payroll Service Like ADP or Paychex to prepare...payroll"
and...
"...one in three report spending more than $500 per month on payroll services"
While most of my small business clients tend to spend in the $100 to $300 per month range, it is interesting to note the amount of small business employers choosing to outsource coupled with the amount business owners are willing to pay to reduce their payroll tax administrative burden.
Most of the small business owners I work with tell me (as a reason they are choosing to outsource):
1. They have little knowledge of payroll tax compliance regulations
2. They have some knowledge but don't have time to learn all of the payroll tax compliance regulations
3. They are knowledgable of payroll tax compliance regulations but it is more cost effective to outsource than to perform payroll administration themselves
Based on personal experience over the last ten years, most owners and accountants are interested to learn of how many small business owners outsource payroll services with just one or two employees. During our conversation, I can often reference a one or two employee company I had just set up in the current or previous week that had made the choice to outsource.
With time savings becoming ever more valuable in the struggle to operate a successful business, it seems to be becoming more justified to outsource a compliance function like payroll services - which, at the current rate of government regulation changes and requirements, may become more and more of a necessity and less of a convenience.
A note from the forward in the survey...
"When it comes to payroll taxes, one-third of small businesses report spending more than six hours per month on the administration of payroll taxes, which, while it may not sound overly burdensome, amounts to more than 72 hours per year, or nearly two full work weeks."
That's an eye opening amount of valuable time, and the study asked if small business owners were outsourcing payroll in order to reduce their time spent on payroll administration:
40% of the respondents said they "Use a Payroll Service Like ADP or Paychex to prepare...payroll"
and...
"...one in three report spending more than $500 per month on payroll services"
While most of my small business clients tend to spend in the $100 to $300 per month range, it is interesting to note the amount of small business employers choosing to outsource coupled with the amount business owners are willing to pay to reduce their payroll tax administrative burden.
Most of the small business owners I work with tell me (as a reason they are choosing to outsource):
1. They have little knowledge of payroll tax compliance regulations
2. They have some knowledge but don't have time to learn all of the payroll tax compliance regulations
3. They are knowledgable of payroll tax compliance regulations but it is more cost effective to outsource than to perform payroll administration themselves
Based on personal experience over the last ten years, most owners and accountants are interested to learn of how many small business owners outsource payroll services with just one or two employees. During our conversation, I can often reference a one or two employee company I had just set up in the current or previous week that had made the choice to outsource.
With time savings becoming ever more valuable in the struggle to operate a successful business, it seems to be becoming more justified to outsource a compliance function like payroll services - which, at the current rate of government regulation changes and requirements, may become more and more of a necessity and less of a convenience.
There are various online sources to provide you informative details on this topic, but this is one is very helpful.
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