Top 8 questions to consider when evaluating a payroll provider

How should a provider manage complex payroll situations like multi-jurisdictional taxation?

The provider should manage on-going 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.

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