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- How should a provider manage complex payroll situations like multi-jurisdictional taxation?
The provider should manage ongoing tax allocations based on the setup required in the payroll system. They should also have the ability to manage tax allocations that change every pay period. Depending on the time system used, the provider should also develop the capabilities to provide a tax allocation split. This enables pre-tax deductions to be split in the same allocation as earnings. - How does the payroll provider manage the recording of stock options or RSUs?
An integration that provides the stock administrator with the states and localities, as applicable, and the related tax rates should be applied. Many stock administrators don’t have payroll tax tables so this approach provides them with data so they can provide the appropriate wage and tax data for payroll recording. - What is the provider’s tax filing timeliness and accuracy percentage? Approximately, how much in penalty have they had to pay on behalf of their clients?
Tax filing timeliness and accuracy percentage matters down to the 1/100th percentile. At Alight, we have over 99.99% success. We have done considerable benchmarking with other tax filing vendors. Our clients pay significantly less than when with other tax filing vendors. Quality assurance controls as well as balancing and reconciliation activities should be taken into account to ensure all tax filings, deposits and payments are sent with the highest quality. - What quality assurance programs and related audit controls are in place?
A number of quality and control routines should be used through the entire payroll process life cycle. A payroll provider should have a tool to track and monitor all of the quality steps within the payroll process. The tool should provide automated alerts and notifications to the payroll team to ensure they have completed all of the appropriate steps before moving to the next phase. Defensive queries and audit reports used for each payroll cycle should be stored within this tool for auditing purposes. - In cases where the payroll provider owns the banking relationship, when should funding be requested for net pay, garnishment and tax?
Often, funding for net pay is requested two days prior to settlement date. For tax, funding should be requested on tax due date and not related to check date. The provider should not request funding on check date and hold until the funds are due. - How does the payroll vendor handle end-to-end garnishment administration?
A top payroll provider should have a garnishment tool that helps them administer the end-to-end solution. The tool not only holds electronic copies of the garnishments, but also has a client portal to manage the upload process and the status of each garnishment for reference. This tool should interact in real time with Workday and the team, allowing the provider to process in tenant to manage the garnishment process for all on-demands and on-cycle payrolls. - How does the provider manage payroll tax reconciliation?
Reconciliation of all payroll tax liabilities and deposits should be on a daily, weekly, monthly quarterly and annual process. This ensures the provider is able to meet a high level of accuracy of payroll tax deposits and filings. - Does the payroll provider’s tax vendor include the filing of amendments and new jurisdiction registration in their scope of services at no additional charge?
Ensure your payroll provider is a true end to end solution. Many providers say they include end to end service; often times they charge additional fees for the filing of amendments and new jurisdiction registration.
Top 8 questions to consider when evaluating a payroll provider
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