PEO vs Payroll Service Provider: Why Use a Professional Employer Organization

Payroll processing is ranked among the least favorite tasks for employers of small-to-mid-sized businesses. It’s difficult and time-consuming to navigate the turbulent waters of tax liability, payroll withholdings, and paycheck errors while under pressure to meet every deadline without fail. That’s why outsourcing payroll to a PEO can take the burden off your shoulders, mitigate your risk, and help you refocus your time and energy on growing your business. Here’s how.

PEO vs Payroll Service Provider

What’s the difference between a payroll processing company/payroll service provider (PSP) and a Professional Employer Organization (PEO)? There’s a significant difference in service levels and legal risk for your business.

Payroll is an inherently complex process. There’s a risk of incomplete or inaccurate information, miscalculations, or even fraudulent activity that can lead to expensive fines, penalties, and even litigation. Mistakes made in job classification, deductions or withholdings, missed deadlines, or a security breach can have serious consequences. The Internal Revenue Service (IRS) assessed over $6.8 billion in civil penalties on employment taxes in 2021.

While a PSP can handle standard payroll processing, tax compliance, and W-2s, they do not share any of the liability or legal burden for mistakes, human errors, or fraudulent activity. You are on your own to deal with the consequences with the IRS. You will also have to handle any payroll questions your employees have, as PSPs do not typically support employees.

When a business partners with a PEO, the PEO becomes the employer of record for the client’s employees. As a co-employer, the PEO files and remits all taxes under their employer identification number (EIN) instead of the client. This means a PEO is fully vested in ensuring payroll, taxes, garnishments, and other payments are handled correctly every time. If a mistake or issue arises, the PEO shoulders the liability and responsibility to resolve the issue with the IRS.

A PEO helps keep your business compliant

PEOs like Ataraxis have the expertise to navigate all federal, state, and local regulations related to payroll, including withholding taxes, filing deadlines, and more. When you partner with a PEO, you don’t need to worry about staying up-to-date on the latest payroll laws. Your PEO will take care of that for you.

When there are changes in tax laws, Ataraxis PEO will ensure that tax deductions are made correctly, and regulations are followed to a T. If your company is expanding into other states, you don’t have to bear the burden of understanding tax laws in each of those states. We can navigate those waters for you — reducing the risk of a costly tax error.

What makes Ataraxis PEO different

At Ataraxis PEO, we take ownership of the entire payroll process, including mitigating risks and maintaining compliance with federal, state, and local regulations. We provide comprehensive payroll services for you and your employees, which include:

  • Preparing and sending all tax statements for our clients
  • Preparing and mailing out all W-2s
  • Computing tax liabilities
  • Processing quarterly 940 and 941 tax forms
  • Tracking time and attendance of your employees
  • Tracking paid time off, vacation days, and sick days for your employees
  • Handling all verification of employment requests for your employees
  • Managing all garnishment and child support payments

We take care of the administrative tasks so you don’t have to. Your time will not be consumed with checking tax regulations or answering payroll questions. We have a robust payroll process with experienced Ataraxis payroll specialists who are only a phone call away.  They will answer your questions and make sure you and your employees have prompt, personalized support. 

At Ataraxis, payroll is just the tip of the iceberg.  Our complete business solution includes Human Resources,  assistance with benefits administration, such as retirement and insurance, employee onboarding, workers’ compensation,  and so much more.

Partnering with Ataraxis will ensure you stay compliant, mitigate your risk, and give you more time to run and grow your company. Our experienced team is committed to providing the highest quality of service to ensure satisfaction for both you and employees.  You won’t find this same level of service with a PSP or even other PEOs.

Contact us today for more information about how we can lighten your workload, mitigate your risk, and give you more time to grow your business.

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