Payroll Service providers are a major transaction for small businesses – an estimated 41% of US businesses use them.
Protection of the employer’s cash flow
The Payroll Service provided by payment service providers range from payroll processing to the protection of the employer’s cash flow. Salary treatment includes gross wages of employees, deductions and net wages; printed payment checks (for employees who do not choose a direct deposit); preparing salary reports for management; and prepare tax returns. PSP provides valuable knowledge for employers who cannot develop it independently.
PSPs, which support the movement of employers ‘money, are responsible for paying taxes on employees’ salaries and paying net wages to employees. Professional organizations of employers go further and ask employers to hire the employer and rent it to their former employer. OPE assumes responsibility for the payment of employees’ net wages and all benefits, as well as the financing of all benefits.
Problem with Payroll Service provided
The problem is that the PSP, which supports the employer’s money, cannot be used for the purpose for which it is intended. Employees must receive their net salary because they will certainly be heard if they are not. But tax authorities are not at the door of the PSP, which requires the transfer of social charges. PSP directors may divert funds for Payroll Service taxes, perhaps later by covering them with other amounts deductible from employee salaries.
Tax authorities may require … Read the rest...