Does your business use an outside payroll service? Are you thinking of using one?
Payroll service companies perform an important function assisting employers comply with payroll tax laws. But these services pose risks for employers.
There are three categories of payroll service companies. In all three categories, the payroll service company computes employees’ withholdings and net pay, compiles payroll accounting records for the employer, and prepares payroll tax returns for the employer.
The first category of payroll service companies are payroll service providers (“PSPs”). A PSP prepares payroll tax returns using the employer’s employer identification number (“EIN”). The employer signs and files the tax returns. » Read more..
