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These
are the cost elements of every employer's payroll system
• The payroll
• FICA
and Medicare Taxes
• FUTA taxes (Federal Unemployment)
• SUTA taxes (State Unemployment)
• Clerical Administration
• Workers' Compensation Insurance
The last three are variable—dependent
on the individual employer's unemployment claims history,
internal costs of performing payroll, and the frequency and severity
of injuries
covered by the workers' compensation policy. This goes to show that you
cannot compare
a quote for PEO services to a quote for workers compensation alone. National
studies indicate that employers spend as much as 5-8% of payroll on administration
duties alone.
Administrative costs include: estimated amount of costs
associated with payroll processing, all employee tax filings, check
printing, and liability assumed with these functions. It also includes
the lost revenue of employee time associated with these tasks. The
US Dept. of Labor estimated that these expenses cost most businesses
8.45% |
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