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Glossary
A payroll provider is a third-party company that handles everything related to employee compensation.
A payroll provider is a third-party company that handles payroll – writing paychecks for employees, making sure pre-tax holdings for benefits and retirement accounts are withdrawn, paying taxes, and filing forms – on behalf of your business.
Some payroll providers also offer additional services like HR management and regulatory compliance. However, unlike Professional Employer Organizations (opens in new tab) – which offer similar services and follow a similar pricing model – they don’t co-employ your staff.
If you’re using a payroll provider, it’s important to communicate which employees have health insurance so they make sure to withhold the right amount of pre-tax dollars to pay for monthly premiums. You can work with your broker (opens in new tab) or insurance company to get this information.