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How many of you do your own payroll?

Home Practice Management How many of you do your own payroll?

  • Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2374
    Joined: 03/01/2018

    Curious to hear from other private practice folks that handle their own payroll. We have a small and pretty simple practice and bringing payroll in house is something I’ve contemplated. It doesn’t seem like it would be too difficult or complicated but you don’t know what you don’t know right?

    Local CPA firm handles it now, they’ve gotten bigger, costs have gone up, overall service has gone down, not looking to move to a different CPA at this point but I think we could handle this. We would use Gusto or one of the other many web platforms out there.

    Anyone have a good or bad experience doing this? Any advice appreciated.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #239700 Reply
    Avatar raddds 
    Participant
    Status: Dentist
    Posts: 9
    Joined: 07/02/2016

    I have done my own payroll for over 30 years. It is not difficult but you do need to understand the tax forms and due dates (monthly, quarterly, annually). It takes less than an hour each month (five employees) and a little more time quarterly. I just follow a list and it is easy to learn. Year end takes a couple of hours but has become easier as the forms/info are now carried from year to year. A spouse or trusted employee can do it. QuickBooks/Payroll makes it simple. You do it on line, costs per employee, they do charge extra for certain documents, but may be cheaper than a CPA. There are other payroll software programs, even one for Excel. Some banks will do it with direct deposit and a monthly fee. If you don’t mind the paper chase, it will not be hard to implement.

    #239705 Reply
    Liked by PhotonsRGR8
    Avatar DavidGlennCPA 
    Participant
    Status: Accountant
    Posts: 57
    Joined: 06/12/2019

    I highly recommend Gusto.  Once you set up everything they handle the rest.  You just need to enter the hours.  For salaried employees you can set it on Auto Pilot where it runs it automatically.  It will even sync with your QuickBooks Online or Xero and record the payroll journal entries.

    Onboarding new employees is easy too.  You just enter their email address and they enter all their info online.  No printing W-4s.  The employee enters all that data.

    I had been handling payroll for 10+ of my clients through Intuit Online Payroll and moved everyone over to Gusto last April.  The platform is great and I have had no regrets.

    I would NOT recommend trying to manually schedule tax deposits or to file your own payroll forms.  Not worth your time and too many ways to screw it up.

     

    While I can’t speak for all CPAs, my personal opinion and those of many others is that we don’t really like doing payroll as a service.  It’s more a necessary evil that just needs to get done.  It’s a time consuming and low margin service.  Your CPA might be glad you’re moving it somewhere else…

    David Glenn, CPA | Glenn Advisory
    https://www.taxcpafordoctors.com | (808) 321-5664

    #239744 Reply
    Liked by PhotonsRGR8
    Hank Hank 
    Moderator
    Status: Attorney
    Posts: 1395
    Joined: 03/27/2017

    I don’t know if this qualifies as “doing your own payroll”, but we’ve been using SurePayroll and generally we’ve been happy.

    The cost was lower before Paychex bought them out, but it still seems reasonable.

    #239745 Reply
    Liked by PhotonsRGR8
    triad triad 
    Participant
    Status: Dentist, Small Business Owner
    Posts: 272
    Joined: 04/29/2016

    I did my own payroll when I first started.   totally not worth it.  I think I pay <$80/month now with gusto.

    #239748 Reply
    Liked by PhotonsRGR8
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2374
    Joined: 03/01/2018

    Perhaps I phrased things a bit confusing, by do our own payroll I certainly don’t mean do things manually. Using Gusto or a similar service rather than passing it on to our CPA is what I mean.

    I imagine it would be simpler to do this transition 1/1?

    I’ll reach out to Gusto. I wonder if we transition to them mid year, do they do all the data entry for numbers that have happened YTD?

    Assume Gusto handles health insurance premiums and HSA contributions for S Corp shareholders correctly? I know folks have said that some payroll companies still don’t get those correct on W-2s – included in comp but not subject to FICA.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #239752 Reply
    Avatar DavidGlennCPA 
    Participant
    Status: Accountant
    Posts: 57
    Joined: 06/12/2019

    Gusto will do the transition mid-year but it can take them 2-3 weeks.  When I moved all my clients over I found it easier to just enter the data myself.  For a non-CPA this might be too risky a task though.

    It’s easiest to make the change 1/1 then you can use December to enter all your data and be ready for the first payroll of 2020.

    You might be able to get them to give you a free month or two if you move over now vs switching in January.  Use it as a bargaining chip.

    You’ll need to watch the health insurance and HSA contributions.  Gusto does have you indicate which employees are 2% shareholders.  This is very commonly missed and I’ve heard it missed by Gusto.  Not sure how much was Gusto and how much was the user though.

    I would speak with your rep up front about this and how to make sure it hits the W-2.  You either need to have it be a part of each check or run a special payroll at year-end to make it hits the W-2 and Q4 941 correctly.

     

     

    David Glenn, CPA | Glenn Advisory
    https://www.taxcpafordoctors.com | (808) 321-5664

    #239764 Reply
    Avatar molar roller 
    Participant
    Status: Dentist
    Posts: 45
    Joined: 05/31/2018

    At some point, Costco offered a discount payroll service at intuit. I was using it anyway since it was called paycycle.com. with the Costco discount, I pay around $30 / mo for 10 employees. I just enter hours and everything else is done automatically. We don’t do hsa but I’m sure it’s capable of handling it.
    It’s difficult to determine if this offer is still around.
    If you are a Costco member, might be worth investigating. I’m not, btw, and haven’t been for 5 years, but still pay the same rates.

    #239792 Reply
    Avatar NowOpenWide 
    Participant
    Status: Dentist, Small Business Owner, Spouse
    Posts: 3
    Joined: 04/10/2019

    We do payroll for 9 employees using Intuit Online payroll (which I initially setup through BOA). Pay about 36/month. Just have to enter the hours each pay period. Initial setup is entering what employee entered on 3-4 forms. All the forms are prepared by Intuit and I just have to check and click on a button to submit. It takes about 1-2 ours total each month for me. So far it is working out ok. I like the control I get by knowing each form being submitted, details in it and all. YMMV 🙂

    #242467 Reply
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2374
    Joined: 03/01/2018

    I’m still trying to figure out if Gusto handles S Corp 2% shareholder HSA contributions properly to get a correct W2 without a bunch of hassle and workaround. I’m new to this payroll stuff but surprised this seems to be such a common issue (among lots of the providers in this space) given this is not a new problem.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #242468 Reply
    Avatar DavidGlennCPA 
    Participant
    Status: Accountant
    Posts: 57
    Joined: 06/12/2019

    Here’s a link to Gusto’s support page: Set up benefits for S-Corp 2% shareholder-employees

    Out of curiosity I played around with my Gusto account just now and it seems pretty straightforward.  You can set up a specific amount to be added to each paycheck.  The easiest would be to take the monthly premium the company is paying and add it to your monthly payroll for you (or spread it out so the annual total is correct if you pay yourself more often than monthly).

    Or you include the total company paid health insurance on your last payroll in December.  This is a little less automated and you might forget.

     

     

     

    David Glenn, CPA | Glenn Advisory
    https://www.taxcpafordoctors.com | (808) 321-5664

    #242501 Reply
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2374
    Joined: 03/01/2018

    The trouble is that HSA contributions need to be reported different than health insurance premiums – both are included in Box 1 but not Boxes 3 or 5 on the W2, which is easy enough, but I believe health insurance premiums end up in W2 Box 12 while HSA contributions need to end up in Box 14. If HSA contributions end up in Box 12 stuff gets screwed up because it won’t match with the deductions on the 1040.

    I’ll report back when I hear from Gusto.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #242503 Reply
    Avatar DavidGlennCPA 
    Participant
    Status: Accountant
    Posts: 57
    Joined: 06/12/2019

    Sorry I misread your post and answered about health insurance premiums instead of HSA contributions.

    I would put company paid HSA contributions for 2% shareholders also in Box 14.  I can’t give you an exact cite for that but the instructions to the W-2 that say to put employer paid HSA contributions in Box 12 are clearly only talking about non 2% shareholder employees.

    I also wouldn’t say that putting it in Box 12 is wrong.  What matters is the the S-corp deducts the contributions, reports in Box 1 but not 3 or 5, and the shareholder deducts the HSA contributions on his/her return.

    Since the company health insurance premiums and HSA contributions are treated the same on the W-2 (Box 1 but not 3 or 5) it makes sense to me to report them as two separate Box 14 items.  This gives the shareholder/employee enough information to claim the deduction for both in their proper places on their 1040.

    Gusto lists HSA contributions as a company paid benefit like health insurance premiums but I do not know how they show it on the W-2.

    I’m curious to hear what Gusto says.

    David Glenn, CPA | Glenn Advisory
    https://www.taxcpafordoctors.com | (808) 321-5664

    #242505 Reply
    Liked by spiritrider
    Avatar HumbleInvestor 
    Participant
    Status: Physician, Small Business Owner
    Posts: 207
    Joined: 12/28/2016

    I could not figure out the HSA portion both in QB desktop and also funding the fidelity HSA account every paycycle and just doing it outside of payroll once a year and having the CPA account for it on the return. If any one that was successful can point some direction, I will appreciate it.

    #242510 Reply
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2374
    Joined: 03/01/2018

    Sorry perhaps ignore the Box 12 stuff I was talking about. I think I got wires crossed with a similar thread on bogleheads.

    I think both HSA and health ins premiums end up in box 14. ?

    HSA contributions for non shareholder employees may go in Box 12 code W. But if done so for a 2% shareholder I think this creates problems.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #242511 Reply

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