The Quick Guide to Payroll for Businesses

The Quick Guide to Payroll for Businesses

So you started a business. It’s doing well, it’s growing and you have a few employees. Now you have to figure out payroll. Most businesses are started because of passion or expertise—but it’s rare for that passion to extend to payroll and HR. Part of a smart business strategy is finding the right payroll and HR solution for you.

There are three common approaches to the payroll and HR challenge.

Do it Yourself

Typically, business owners will handle payroll or HR themselves in the early days. A business owner can do payroll very effectively in Microsoft Excel or through a subscription service like Intuit Online Payroll or a similar low-cost program.

The benefit to this solution is the savings but the stakes are high. Legislation and tax laws are constantly changing and can be confusing and time-consuming. Even a small mistake can result in financial penalties, not to mention the time spent dealing with the issue.

Employ a Trusted Advisor

The more a small company grows, the more payroll and HR responsibilities will take valuable time away from core business issues. Many business owners will hire a CPA, Bookkeeper, or Office Manager to handle payroll. However, it’s rare for someone to be a payroll processing and HR expert. You’ll probably have to stay involved and handle any HR issues as they arise.

Outsource to an Organization

As businesses continue to grow, many business owners find it’s more cost-effective, efficient, and minimizes risk to outsource their payroll needs to the experts. This can be an Administrative Services Organization (ASO) or a Professional Employer Organization (PEO).

ASO companies can be a great option, but aren’t one-size-fits-all. It’s important to see what type of services they offer before outsourcing. Some are great at streamlining the payroll and tax process by cutting paychecks in an efficient manner, and others have a holistic approach to people practices and offer an integration of HR, payroll, and benefit offerings.

Payroll service providers like ADP and Paychex are available nationally, and there are local providers in nearly every market. These types of companies process a high volume of paychecks, but may not offer high-touch customer service or high-level HR expertise.

If you’re looking for reliable support with both HR and payroll, PEOs, like Xenium, are often your best bet. PEOs combine payroll and HR expertise and offer high-touch customer service. In addition to processing payroll and tax administration, PEOs offer employer services like human resources, compliance support, employee benefit programs401k, and workers’ compensation.

Due to the level of legal responsibility in the relationship, PEOs have a real incentive to keep up with compliance and ensure payroll is processed accurately. This peace of mind allows you to pass off the day-to-day HR administration and focus on what matters—growing your business.


The decision of how to handle payroll and human resource functions will be different for each company based on size, growth projections, time, skill-set, and revenue.  Thankfully, there are plenty of choices available to business owners, from DIY to comprehensive coverage.

Brandon Laws

As Director of Marketing, Brandon Laws leads all marketing efforts for Xenium, providing oversight on all marketing campaigns, digital marketing strategy, events, sponsorships and public relations. Brandon brings a positive energy to every aspect of his role at Xenium—from internal initiatives around culture and wellness to industry thought leadership through the Xenium podcast and other social efforts. Active within the HR community, he currently volunteers on the board of the Portland Human Resource Management Association as the Director of Marketing & PR.

Facebook Twitter LinkedIn 


  1. They say that doing the payroll is hard. Luckily, blogs like this exist. Thank you so much for this quick guide to payroll for businesses. This will definitely be a great help for everyone who is in the Human Resource field and to the employees at recruitment firms especially here in our country, Philippines.

  2. Informative article ! Payroll can be the most horrifying of tasks if carried out improperly. Associations that need to improve their time and resources need to get this right.

Submit a Comment