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Make Your Payroll Over the Internet

Intuit's new QuickBooks Online Payroll Service takes care of your business's tax payments and paperwork for less than $50 a month.

By Mike Hogan, PCWorld   

Currently, about 20 percent of small businesses in the United States rely on outside service bureaus to complete the blizzard of paperwork and to fund the various and sundry tax pots required by federal, state, and local governments. Using a service bureau usually requires transferring payroll information by phone at a scheduled time a couple of days before payday.

Intuit lets you send off payroll data from within its Internet Explorer-enabled QuickBooks accounting software about 32 hours before the checks are cut. The company's Payroll Service Center files all necessary state and federal tax forms and payments, creates W-2 and other employee forms, and even directly deposits paychecks into employee bank accounts.

You can preview all calculations in QuickBooks before transferring the information. Because you can see how much is being debited from which account as it happens, there is less danger of making mistakes.

"I used to pick up a telephone, dial an 800 number and then a whole series of numbers and codes, at the end of which I could only hope I had input everything correctly," said Ron Treleven, director of administration for Socratic Technologies, a 19-person market research company in San Francisco. "Even though it probably took only four or five minutes to key in the data, that's four or five minutes longer than it takes me with the QuickBooks payroll service--and I'm a lot more confident that it has been done correctly." Treleven added that he saves a lot of time by not having to rekey payroll report information into the accounting software afterward.

The QuickBooks Online Payroll Service charges a base rate of $20 a month, plus $1 per employee per payroll run for tax services, and another $1.50 per employee per payroll run for direct deposit of paychecks. That works out to about $565 per year for five employees who are paid biweekly, said Rene Lacerte, Intuit's group product manager for the service. According to the Beacon Research Group's Business Consumer Guide, the average annual cost of basic payroll service for five employees paid biweekly is $845 through a service bureau--and that doesn't include charges for report and paycheck delivery by courier.

Mie-Yun Lee, editor of the Business Consumer Guide, reports that the number one payroll concern among small businesses is that they must surrender responsibility for timely tax payments to the service bureaus. The average small business finds itself filing up to 40 different federal and state tax forms a year, noted Lacerte, and larger businesses have to file as many as 70. According to the IRS, fully one-third of all businesses have paid penalties for late payroll tax filings or payments.

The service becomes available to most QuickBooks users today, although the application process will likely take a couple of weeks. Applications are available by calling 1-800-332-4844. Currently businesses in Florida, Indiana, Kentucky, New Jersey, Ohio, and Pennsylvania are excluded from the service because of certain peculiarities in those states' tax filing requirements. All states but Florida and New Jersey should be supported by the first of the year, said Lacerte. The QuickBooks service includes access to Intuit's payroll and tax experts via a toll-free phone number.