With the right payroll integrations, you can save valuable labor hours and decrease payroll errors. Once your payroll program is integrated into other HR software, you can easily track deductions, garnishments, and pay stubs. If you’re worried about your company’s legal compliance, the right payroll and deduction integrations can help. 

Enterprise-grade systems are too costly for small businesses, and basic accounting tools lack the HR tools you need. Through the best payroll software, you can get an all-in-one payroll system with core HR management tools.

How Payroll Integrations Work 

Depending on the payroll system you use, you can likely integrate your payroll data with other apps. For instance, you may be able to link your payroll software to time-tracking, benefits, and HR programs. 

Once your payroll software is integrated with other software, each program’s information will update simultaneously. If you change an employee’s home address in the payroll program, it should automatically update the address in the benefits app. 

This type of payroll integration simplifies the work you have to do as a small business owner. Instead of manually changing data in each app, you only have to change it once. 

Additionally, some of the best platforms have employee self-service features. This means the employee can change their information and download their pay stub on their own, so your HR professionals don’t have to waste labor hours doing the same tasks.

Typically, your payroll integrations are handled by a payroll service provider, like Asure. The service provider takes care of retirement accounts, insurance, and time-tracking integrations, so you can focus on running your business.

Small Businesses Are Obligated to Deduct Certain Taxes 

As a small business owner, you are legally obligated to deduct certain taxes from employee paychecks. 

• Federal Insurance Contribution Act (FICA) taxes: FICA taxes include Social Security and Medicare taxes. A total of 15.4% of the employee’s gross earnings go toward these taxes.
• Federal Unemployment Tax Act (FUTA) taxes: If you pay the employee $1,500 or more during the calendar year, you must deduct FUTA taxes. This tax is also required from any company that has at least one employee for at least 20 weeks out of the year. This tax is only paid by employers. It is 6% of the first $7,000 the employee earns.
• Additional Medicare: Single individuals who earn more than $200,000 and married couples who earn more than $250,000 must pay the Additional Medicare tax. This tax is 0.9% of the employee’s wages. 
• State Unemployment Tax Act (SUTA) taxes: The amount you pay for SUTA taxes depends on the state you’re in. SUTA taxes are eligible for a federal tax credit that reduces your FUTA taxes, so you can alleviate some of this cost.
• State and Local Taxes: Depending on where you live, you may have to deduct other taxes. For instance, Washington state’s Paid Family and Medical Leave (PFML) tax is 0.74% of the employee’s gross wages. However, each state has different rules, so it’s important to look up the required taxes for your area. 

Payroll tax compliance isn’t optional. If you don’t deduct these taxes, you may face legal penalties and fines. More importantly, it can harm your brand image and negatively impact your organizational culture.

How Payroll and Deduction Integrations Support Compliance

For many small businesses, the hardest part of handling payroll deductions is knowing how much you need to deduct. Payroll integrations ensure accurate calculations. More importantly, these programs are designed by tax and HR experts who understand compliance issues. By integrating your deductions into your payroll system, you can improve your compliance and decrease the amount of time your team members have to spend on handling payroll. 

Direct Deposit Support 

With the right payroll integration, you can go beyond just ensuring compliant deductions and accurate paychecks. You can make sure workers are paid the correct amount in wages. Good payroll software allows you to set up electronic payments, so each worker’s pay can go directly to their bank account. In some programs, you can even split paychecks between multiple bank accounts. 

Help With Wage Garnishment 

As a part of your legal compliance, you are also expected to garnish an employee’s wages if ordered to do so by a court of law. Payroll integrations can improve your legal compliance by making wage garnishment automatic and accurate. 

Automatically Generate Tax Forms 

There are a range of tax forms, such as W-2s, W-4s, and 1099s, that you are expected to file. Payroll integrations can automatically generate tax forms whenever they’re needed. You don’t have to spend your time and energy figuring out which tax forms you must complete or when they’re due.

Deduct the Correct Amount 

When payroll software is integrated into other HR programs, it can instantly pull up the number of dependents that an employee has and information about their deductions. The software can automatically deduct the correct amount from each paycheck, so you don’t have to worry about being penalized for errors.

Record Pay Stubs

Whether you are worried about compliance or want to track how your employees’ salaries change over time, it’s convenient to have a clear record of your workers’ pay stubs. Plus, employees frequently ask for copies of current and past pay stubs. By giving workers access to their pay stubs and HR information, you reduce the amount of time your HR team has to spend on printing copies of pay stubs and answering other payroll questions.

Use Time Tracker Integrations 

High-quality payroll software can be integrated into your company’s time tracker. This means the software can instantly update with the number of hours each employee works. You don’t have to manually transfer time-tracking data to calculate each worker’s pay because the software’s integration handles it for you.

The Advantages of Working with a Full-Service Payroll Provider

When you work with a full-service payroll provider, you can enjoy a number of important benefits. 

• On-time wages
• Tax and legal compliance
• Accurate payroll data 
• Fewer errors 
• Direct deposit functionality

As a business owner, you need to focus on what you do best: running a business. You should leave payroll, deductions, and compliance issues to the experts. 

Payroll and Deduction Integrations Can Make Your Payroll Department More Effective

Whether you are a small business or a multinational corporation, the right payroll and deduction integrations can save you money on labor costs, speed up payroll processing, ensure compliance, and reduce the number of human errors. Plus, you can enjoy these benefits for a fraction of the cost of normal HR and payroll services. 

If you’re interested in learning more about payroll integrations and outsourced HR, reach out to our small business payroll and HR experts today.