You know you need a payroll service, but did you know there are three levels of small business payroll support?
Your options are payroll software as a service (SaaS), full-service (sometimes called “managed”) payroll, or a PEO. In this article, we’ll compare them and show how to know which is best for you.
CSI Accounting & Payroll has provided full-service payroll for 60 years. We’ve heard a lot of questions about the different types of outsourced payroll, including:
- What is payroll software, or SaaS?
- What is full-service, or managed, payroll?
- What is a PEO, or Professional Employer Organization?
Payroll SaaS
When you “hire” a SaaS (software as a service), you’re essentially paying to use the software. By our definition, it’s barely outsourcing.
Payroll software is designed to guide you through your payroll process, payroll taxes, and other related tasks. However, most SaaS companies make compliance your responsibility, and if you have questions, assistance from a call center is generally slow.
Companies that provide SaaS: Gusto, QuickBooks Payroll, and Patriot. This is not an exhaustive list, and these companies may offer additional support.
Who SaaS is good for: Very small businesses with someone in-house and knowledgeable running the software.
When to move to full-service payroll: If you’re having issues with tax filings or payments, if you can’t keep up with payroll law changes, or if you’re spending more time on payroll than is reasonable.
Test how compliant your payroll is.
Full-Service, or Managed Payroll
Full-service, or managed, payroll is what you probably first think of when you hear “payroll service,” so we’ll define it as such. It’s what we offer at CSI Accounting & Payroll.
With CSI, you input your payroll data, and your dedicated Payroll Specialist accurately pays your employees and handles your payroll taxes and filings. Here’s everything that your expert handles for you. We know your business and keep you compliant on federal, state, and local levels.
Meanwhile, we’ve noticed the big-name companies that use call centers making a push toward resembling SaaS. They teach you how to handle more on your own so you assume responsibility for compliance.
Companies that provide full-service payroll: Paychex, ADP, independent payroll companies, and accounting firms like CSI Accounting & Payroll. Again, this is not an exhaustive list, and these businesses may offer other levels of support.
Who full-service payroll is good for: Small and midsized businesses who can’t (or don’t want to) be responsible for compliance, or who find that running their own payroll takes too much time.
When to move to a PEO: If your business has high needs that a full-service payroll company can’t help you with, or if you need co-employment or pooled benefits.
PEOs
Professional Employer Organizations (PEOs) are the big dogs of the payroll, HR, and benefits world. They enter into a co-employment relationship with your business, allowing you to put your payroll, benefits, and other employment tasks in their hands.
Companies that provide PEO-level payroll: Some of the big-name companies that provide full-service payroll also provide PEO services, such as ADP and Paychex.
Who PEO-level payroll is good for: Midsized or large businesses (or small businesses with more flexible budgets) with high employment-related needs. If you need co-employment or certain pooled benefits, you can only get them from a PEO.
When to step back to full-service payroll: If you aren’t limited to a PEO but also still want to outsource payroll and other things like retirement plans, HR services, and workers’ compensation insurance. At CSI, we’ve been getting more and more clients who are coming to us from PEOs because they say we offer everything they need, but with better service and a lower cost.
Full-Service Payroll That Fits Right!
For many small and midsized businesses, it’s like Goldilocks and the Three Bears. (SaaS is too cold. PEOs are too hot. But full-service payroll is juuuuuust right.)
If you relate, are you ready to check out full-service payroll with CSI? To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about our pricing.
