For owner-operators, there often comes a time when they are faced with a decision: Do they expand their business and add trucks and drivers, or stay a single-truck operation. If the decision is made to expand, there are a series of questions that follow, including whether you hire on lease operators or employee drivers. Do you hire only those with trucks already or go buy company vehicles?
These are not easy decisions, and they sometimes overshadow an even easier decision, but one that has the potential to cause extreme disruption if not planned for: paying these workers. Whether they are lease or company drivers, these men and women who have helped you expand their business expect to get paid - and paid correctly and on time.
Do you pay them by the mile or a flat rate? Is there a bonus structure or percentage pay plan? Once these decisions are made, you need to make sure the pay is executed. If you do it yourself, which is the cheapest option, there are options to help, such as Quickbooks. But for many, the time spent on weekly payroll can eat into other tasks, especially if the owner is still driving.
For these people, they often turn to payroll services. Paychex, ADP, Gusto, Axon, Intuit, TLC Companies, and Trucker Tax Services are a few of the options out there. A quick Google search turns up thousands of options, though, and social media channels such as the Rate Per Mile Masters Facebook page have regular discussions on which services have worked best. The group is a closed group, so you have to be a member to see posts.
Without actually using the services, it’s difficult to determine which is best for your operation, so do some research on the options and talk to other truckers to get their views on what they like and don’t like. Regardless of what service you choose, there are some basics about online payroll services you need to understand before making a choice.
First, what exactly do these services offer? According to Business News Daily, you would typically get payroll processing services including how much each employee should be paid based on factors such as overtime, holidays, taxes, Social Security and benefit deductions. The services will also withhold employee taxes, file quarterly payroll tax reports and pay tax withholdings to state and federal agencies. They will also generate the necessary W-2 and 1099 forms.
Integration with other accounting programs you may be using is also usually a feature but be sure to ask – you don’t want to do twice the work. Management of paid-time off, mobile access for employees to pay stubs and more, and detailed wage and labor reports are other features of many systems, providing you more insight into what your employees are actually costing you.
Online services also can pay employees via direct deposit, prepaid debit card or paper check. It’s important to note, though, that some of these features come at additional cost, so be sure you know what you are buying.
Once you’ve made the decision to go down the online payroll service route, consider what you need from the service. A recent Inc. article delved into some of these questions. Among them:
- How many employees will you have?
- Will you have any independent contractors?
- What is your growth plan?
- Are you paying taxes to multiple states?
- Will you offer a 401(k)?
Pat Carson, founder of bookkeeping and accounting firm Carson & Crew, told Inc. that before buying, know whether you are paying too much. Some services are as little as $39 per month, but you may run into salespeople who insist you have to take additional packages as part of the plan, raising the cost dramatically.
“If there’s insistence by the sales person that you're required to take these additional services bundled with payroll, that should be a clue that there's something else going on,” Carson told the publication.
PayScale, a provider of compensation software and data-driven insights, put out a list of questions to ask before purchasing a payroll system. Among the important ones are:
- Can you see a sample check stub. How does it look and is it easy to understand?
- Can you generate reports and what kind of reports?
- Can it process different types of taxes?
- Can you make changes/adjustments if a mistake is made?
- What is the level of customer service?
- How will you be billed?
Online payroll services can provide a time savings for those trying to build a company, but there is a cost. Understanding what that cost is, what options are available within the services, and most importantly, how reliable they are in accurately calculating pay and taxes are among the most important considerations.
If you are an owner-operator that is slowly growing the business by adding a few employees, the last thing you want is to spend 5 hours a week trying to figure how to calculate pay for your employees when you should be driving and earning money.