How Do Payroll Services Work? Types of Services Available

In part one of this multi-part blog series, we went over some basics on how payroll services work for a given company. Payroll service providers are a vital part of many businesses, who use them for everything from time and cost savings to regulatory compliance and expertise – and knowing the kinds of services available here is important if you run a business.

At WTA Inc., we’re proud to offer a wide range of outsourced payroll services and other human resource services to businesses around Salt Lake City, ensuring that no matter what your needs may be, we have the solutions available to help you succeed and thrive. Today’s part two of our series will go over the different types of payroll services out there, while part three next time will dig into some tips on making your final selection.

Payroll Services Work

Payroll Service Providers

Abbreviated PSPs, these providers are the most common type of payroll service used by businesses. They handle basic tasks like calculating and distributing paychecks or direct deposits for employees, including deductions and withholdings as needed.

In addition to these core services, PSPs often offer additional features such as tax filing and payment services, onboarding and offboarding assistance for new hires and terminations, and employee self-service portals for tasks like updating personal information or accessing pay stubs.

Professional Employer Organizations

PEOs are a bit different from PSPs in that they’re legally allowed to enter into co-employment relationships with clients. This means they share certain employer responsibilities with the business owner – things like liability insurance, workers’ compensation coverage, and more may be handled together by the PEO and the business.

PEOs also typically offer a range of HR services in addition to payroll, such as employee benefits administration, compliance assistance, and risk management. Some businesses prefer this partnership model as it can provide greater support and resources for managing their workforce.

Administrative Service Organizations

ASOs are similar to PSPs in that they primarily handle payroll tasks, but they may also offer additional HR services like PEOs. However, ASOs do not enter into co-employment relationships with clients – instead, they provide these services on an outsourced basis without taking on any legal responsibilities or liabilities for the employees.

This option may be attractive to businesses who want more control over their workforce and employment decisions but still need help with time-consuming payroll tasks.

Reporting Agents

Another type of specialty agent is the reporting agent, who will typically serve as a connector between the IRS and your business. Businesses who work with reporting agents may do so for the purpose of streamlining tax reporting and communication processes, which can save time and minimize errors.

These are just a few of the many types of payroll service providers out there, and it’s important to carefully consider your options when choosing the right one for your business. Stay tuned for part three where we’ll discuss some key factors to consider when making this decision!

In the meantime, feel free to contact us at WTA Inc. for more information on our comprehensive payroll or other HR services, and how we can help your business grow.