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Taming the Payroll Tax Beast

Managing payroll taxes can be a hassle. Not only is this often task labor-intensive, but even a small error or omission can potentially pose a real risk to your business. Many organizations choose to streamline their processes and focus on their core business by outsourcing payroll tax management. Outsourcing this function helps free up valuable resources in an organization and also helps minimize a business’s risk of incurring tax penalties for noncompliance with applicable payroll tax-related laws.

sb10066222ll-001Any business owner who has handled their payroll taxes in-house generally understands how quickly the task can become complicated. There are over 10,000 different tax types in the United States.1 Government mandates and regulations are constantly evolving, and staying on top of these changes can take valuable time away from an organization’s core business objectives. In addition, handling payroll taxes is often a largely manual, paper-based process with too many opportunities for error. A small mistake in your paperwork could potentially result in costly penalties to the business; in fact, research has shown that 28 percent of tax returns filed by employers end up incurring penalties and interest.3

Payroll tax processing has other potential complications. As more and more employees work from their home or another remote location, payroll taxes can become harder to manage. Keeping up with various state electronic deposit requirements and filing updates can overwhelm a small business. Changing tax rules present additional problems for businesses: With over 19,000 proposed tax rule changes in 2013 alone3, an organization’s IT department can quickly become swamped with software updates.
It’s easy to see why outsourcing payroll tax management can help a business avoid many of these headaches. In addition to helping to free up resources to focus more on strategic business objectives, outsourcing can contribute to significant cost savings for an organization: According to some reports, savings can be as great as 18 percent2. Instead of learning the ropes as you go, your business can rely on a team of experts with access to state-of-the-art technology and current processes.

Contrary to some misconceptions, outsourcing your payroll taxes doesn’t necessarily mean your organization will be “out of the loop.” With online access to real-time status and activity updates from ADP, your business is assured of total transparency. Our team of dedicated account representatives provides a single point of contact when you have questions or concerns.

Outsourcing also helps to ensure that your business’s data is secure and handled correctly. Our team of experts stays on top of every state’s filing requirements, and our systems are updated accordingly. Our secure systems and networks are designed to handle the most confidential of information. There’s a certain peace of mind that comes with putting your payroll taxes in the hands of the experts. Knowing that your filings are being handled by an industry-leading payroll tax provider helps eliminate the worries and hassles that often accompany this task.

If you want help saving time and money so you can focus more on growing your business, the ADP SmartComplianceSM Employment Tax Solution may be the ideal choice for your organization. Compatible with all major ERP payroll systems, this solution can help your business safely manage one of its most significant expenses.

Payroll Tax Beast Infographic



  1. PriceWaterhouseCoopers, “The Hidden Reality of Payroll & HR Administration Costs” January 2011
  2. Internal ADP Data


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