• What does your primary service include?
• How quickly can you re-run a payroll if there is a mistake?
• How long does the average client stay with you?
• If I use your tax filing service, do you cover the penalties and/or interest charges?
• Do you provide filing assistance for local taxes?
• What is the cost to file taxes for multiple states?
• What is the cost for your service for one year, including year-end W-2 forms?
• How long are these rates in effect? What rate increase should be expected after that?
• If there are payroll data mistakes, how long will it take to reconcile the errors and what will it cost?
Questions for references:
• How responsive is the provider to your questions?
• Have you had any problems with accuracy?
• Have you used another payroll service? If so, why did you switch?
Payroll Buying tips
Look for a stable provider
If a firm's only business is payroll, make sure to check the number of clients it supports. To ensure stability, a payroll service should ideally maintain at least several hundred clients.
Double-check the math when switching
Transitioning to a new payroll firm rarely occurs without problems. Be especially thorough in reviewing the first paychecks issued through the service as well as the money paid to cover tax obligations.
Watch prices over time
Do not be swayed by services that waive charges upon sign-up. Often rates go up or charges start accruing after six months to a year of service.
Be wary of low fees
Watch out for providers that offer low base processing rates with expensive add-on features. Your total fees paid may wind up being more costly than those of a provider with slightly higher fees