Question

15.1. A payroll service bureau maintains the payroll master data for each of its clients and pro- cesses payroll for them. A professional employer organization (PEO) not only processes payroll but also provides HRM services such as employee benefit design and adminis- tration. Explain why payroll service bureaus and PEOs are especially attractive to small and midsized businesses.

Answer 1

Payroll service bureaus and PEOs are specially attractive to Small and Midsized Business because usually SMEs don't want to spend huge money on Payroll and HRM services. Through PEOs or payroll service bureaus, SMEs can get cheaper services in respect of payroll services. Payroll services providers have great knowledge in the field of Payroll related laws and norms. They can manage all other activities related to HRM services like employee benefit expenses, calculation of payroll as per income tax rules etc. And they even look after the filling of TDS return of employees on quarterly basis and at the end of the year and provide with the Form16 Part A & Part B.