Learn how leveraging a partner to payroll your contingent labor population can both streamline HR functions, while earning toward diverse spend goals!
Table of Contents:
What Is Payroll? The Basics:
At a very basic level, payroll is the amount of money paid by an employer to its employees. It’s all of our paychecks and the paystubs that go along with it. You might see deductions on your paystub for social security, 401(k) or medical care. Each state (even city) has different laws when it comes to paying employees. The are also different rules and deductions when it comes to the type of worker (full time, part time, intern, independent contractor, etc.) which can make payroll processing more complicated, especially with companies that have remote workers all around the country.
How Does Payroll Work?
Let's get into some of the nitty gritty. The payroll process begins with an employee filling out their tax form. You might be familiar with a few of the most common forms/classifications:
- W4: provides info about the federal income tax that employers withhold from employees’ paycheck
- W2: filed annually by employers for each employee. This form shows each employee’s gross earnings, deductions for income, social security or Medicare taxes, childcare, and retirement savings.
The tax forms tell the employer and the government each worker's respective elections for taxing (i.e. how many dependents they wish to claim or additional deductions to take from their paychecks). Once their W-4 is filed, employees are paid on a set schedule (e.g. every Friday, every x day of the month, etc.). There may also be a difference in how you pay your salaried versus hourly employees!
Payroll teams calculate an employee’s gross wage (pre-tax income) and then withhold FICA (Federal Insurance Contributions Act) taxes like social security, Medicare and federal and state unemployment, or FUTA and SUTA, respectively. Payroll teams also calculate each individual employee’s additional deductions like contributions to retirement or health plans, even union dues or charitable donations. Payroll teams also need to know which employees are exempt (not entitled to overtime) and which are non-exempt (entitled to overtime) to ensure that they're paid accordingly for those hours at the correct rates.
All of these numbers and calculations for each employee are called a payroll register, and those totals are a part of each company’s financial statements!
Why Is Payroll Important?
Now that we've talked about the less glamorous side of payroll, let's dive into why payroll is important in business! Accurately paying employees is important for tons of reasons. From an accounting lens, employees’ wages and taxes directly affect a business' net income. From a human resources lens, it’s critically important to care for your employees’ livelihoods, from maternity leave, to paid time off, to their mandated and elective deductions--employees want to understand why they’re paid the way they are. Employees’ paystubs are important to their own tax filings, too. And from a compliance lens, you’ll want to make sure you, as an employer, are following the law to avoid any potential liability issues with your business and the IRS.
Payroll with Populus Group
Companies have different ways of managing payroll—some do it manually, while others outsource this tedious and difficult job.
At Populus Group, payroll solutions are our most popular service with our customers. We’ve dedicated ourselves to the relentless pursuit of expertise in this area. We act as an employer of record for some or all of our customers' temporary (W2) workforces. We can both support workers that our customers source, or we can help them source workers. Then we take care of all the traditional HR functions, from onboarding (including managing all that paperwork!), to cutting each paycheck, providing benefits (like health insurance, 401(k) options, and more), then we help to offboard when the assignment is complete. We have dedicated teams across the country to take care of each and every contractor our customers engage! We also have specialty teams for unique contingent labor needs, like engaging foreign nationals and independent contractors (1099s).
Payroll & Diverse Spend
More organizations are setting diverse spend goals. This is a benchmark or goal for working with diverse owned staffing suppliers. There are a variety of diverse supplier certifications, such as Minority-Owned Business Enterprise/MBE, Woman-Owned Business Enterprise/WBE, Veteran Owned Business/VOB, Disability-Owned Business/DBE; and LGBTQ-Owned Business, to name a few.
When businesses engage a certified diverse-owned business, they are supporting efforts to close economic divides and contribute to a more just economy by improving access and opportunities. Studies have shown that diversity improves overall innovation, profitability and performance.
MBE suppliers can also offer cost saving strategies due to diversity spend requirements and numerous federal and state tax incentives, tax breaks and potential rebates.
Populus Group is a certified Minority Owned Business and Veteran Owned Business. When organizations partner with us to payroll, for some or all of their contingent workers, they earn Diverse Spend on each and every dollar spent. In fact, we've helped our customers earn more than $1.75 Billion in total diversity spend.
So if your organization is looking for opportunities to promote innovation, profitability and economic equality, diverse spend is a great and simple way to make progress toward all of the above!
How We Can Help Support Your Payroll
We create a customized solution for each customer, while also utilizing efficient and streamlined processes that work for many different customers. Our team of compliance experts tracks the changing legislative landscape so when laws change, so do our solutions. We have a rigorous set of best practices and custom processes for the unique (or not so unique) needs of programs of all sizes. Our priority, aside from excellent, accurate payroll service, is providing people-first, compassionate customer service. We dedicate a delivery team to each account so whether you’re a contractor or an employer, you know exactly who to go to any time you have a question.
Populus Group is unique in that we aren’t localized to a certain region, but rather, our teams are set up to be experts within each of our customer's programs. Our teams are broken down into three separate roles: Payroll Services Specialist (PSS), Employee Relationship Specialist (ERS), and Onboarding Coordinators (OBC). By streamlining payroll processing into these roles, we ensure our contractors and customers are taken care of every step of the way by a true subject matter expert , from their I9s (OBC) to being paid on time (PSS) to knowing who to connect with when they have an issue (ERS).
You can expect exceptional service both as a contractor and as a customer because we simplify payroll processing as much as possible while providing a trusted community to which our contractors and customers belong.
We hope that today, you got just a bit more insight into what payroll means, and all the moving pieces that make up an accurate and compliant payroll register. From varying tax laws around the country to sick leave laws in different cities to COVID-19 leave by county, payroll processing can be a beast to take on. Entrusting an experienced partner can remove burdens from HR teams, while helping to improve access to opportunities for diverse-owned staffing supplies, and earning toward diverse spend goals.
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