Help for Filing Payroll Taxes for Small Businesses
For many small businesses, signing up for an online payroll taxes service is the easiest and least stressful way to get reports in on time without a penalty from the government. Although the EFTPS (Electronic Federal Tax Payment System(r)) provides a way to deduct Federal payroll taxes from your company's bank account, it does not help with any state or local income taxes.
Reporting federal payroll taxes
Employers are required to report their payroll tax obligations and to deposit payroll taxes in a timely manner. The following requirements must be reported:
- Making federal tax deposits
- Annual federal unemployment tax return (Form 940 or 940EZ)
- Employer's quarterly payroll tax return (Form 941)
- Annual Return of Withheld Federal Income Tax (Form 945)
- Wage and Tax Statements (Form W-2)
This is a lot to think about and prepare and does not include state and local requirements.
Purchasing an on-line software package or outsourcing your payroll to a service provider takes this monkey off your back because all of the information is automated and reports are files correctly and on time.
How much does on-line software cost?
There is no completely free online payroll tax software. When searching for on-line payroll tax software be careful because many vendors are listed that sell software for individuals to file their Federal and State income taxes. This is not what you need.
What you will find are numerous vendors who sell complete payroll software that includes the ability for a small business to not only figure the amount of taxes to be withheld from employees' earnings, but will automatically print out and file your tax payments you withheld, your portion of Social Security, your unemployment insurance fees and all other business related employee payroll taxes.
Each software package is priced according to the services you require. You may require a basic package that includes issuing paychecks, keeping track of time off, and preparing monthly, quarterly and year-end tax reports. This will cost less than a package that includes a full HR function and administration.
Some Cost Comparisons
Top 10 Reviews did a cost comparison among some of the top names in payroll software. The prices here represent a base cost with five (5) employees with a bi-weekly payroll. Note that some of these packages include more services than others. Also, you cannot completely judge quality by price alone:
|Payroll Software Comparisons|
|Intuit||$124 + $12 for State|
|ProPayroll||$58 + $10 for State|
|IOI Pay||$66 + $3.50 for State|
|PayChex||$88.18 with free State|
|ADP||$159.57 with free State|
Small businesses love online payroll tax services because they are often bulked in with their small business payroll package, for either a small annual fee or included in the monthly fee. There are over a dozen top payroll companies that provide online payroll tax services. The annual fee may be upwards of $30, and there is usually a small fee for each employee you are filing for ($3-5). You can compare the cost of online payroll tax services using BuyerZone to get competitive price quotes from several payroll companies.Ready to Compare Payroll Services Price Quotes?