Figure 01

 

Staffing Payroll Factors

Your payroll staff is an essential aspect of your business, as it ensures that all your employees are paid accurately and on time. Depending on the size of your business, you may need only one payroll person. During the staffing process, consider all factors that affect your decision.

Selection

Figure 02

Your payroll person should have keen understanding of federal, state and local wage and hour laws and employment tax laws. If the size of your payroll is minimal, she may perform dual roles that include payroll and bookkeeping or accounting duties. If you have an accounting department, you may hire one payroll administrator who reports to the finance or accounting manager. If you do not have a human resources department, you may hire a staffing agency to help you find the right payroll professional.

Payment

Figure 03

Factor in the amount of wages the payroll professional should be paid. This depends on her qualifications and experience and external factors such as your state or city. If your payroll employee is not exempt from overtime under federal law, she must receive overtime pay if she works more than 40 hours for the week. (Byham, 2002)

Benefits

Figure 04

To attract and retain an efficient payroll professional, you may offer her incentives such as health insurance and retirement plan options. To reduce your health insurance liability, you and the employee may share the cost. For example, if you match up to 5 percent of contributions and your payroll professional elects a 5 percent contribution, multiply her wages or salary for the year by 5 percent to get your annual contribution amount. Consider benefit days as well, such as one week of paid vacation and one week of sick time after her first year of employment. If applicable, include any family and medical leave and bereavement time that you offer under company policy.

Considerations

Instead of hiring a complete on-site staff, you may use a payroll service provider to process your payroll and a third-party administrator to handle employee benefits. You may designate one on-site employee to serve as a liaison between your company and the third-party provider. This person would also verify the accuracy of the third-party’s work.

References

Byham, 2002. Essential aspect of business. Payroll Factors, 1(12), pp.200-05.