Software to handle payroll for home healthcare worker
April 5, 2009 1:09 PM Subscribe
We are in the process of hiring a full-time caretaker for my disabled brother. I've been told the best route, once they're hired, is to utilize a payroll company to take care of issues such as social security payments, workmen's comp, overtime, etc. But I'm wondering--is there a software program that can do this just as well (and obviously much less expensively)? I'm looking for something where I could just enter the number of hours worked each week and it would be able to figure out taxes, payment, possibly even be able to print the checks.
Any advice would be most welcome.
Three things here.
If you do this yourself, you're going to need to obtain and maintain a federal Employer Identification Number.
Second, doing this yourself may or may not save you any money. True, you'll save on administrative costs by doing things yourself, but payroll companies do more than just paperwork. They also generally provide insurance for both you and your employee. This costs money, but they get a volume discount that you won't be able to score.
Third, and in no small part due to the things listed above, this isn't a matter of simply punching in a few numbers on a glorified spreadsheet and signing the checks. Taking care of all of the logistical issues involved in employing someone legitimately is actually pretty time consuming; this is what HR departments do for a living. Granted, three people in HR may well be able to manage hundreds of employees, but your first employee will create far more new work than your second, or even your hundredth. Every two weeks you're going to have to spend at least an hour or two on paperwork.
This, as it turns out, is why people either use payroll companies or just pay their employees under the table: doing this yourself is a huge pain in the ass.
posted by valkyryn at 1:54 PM on April 5, 2009 [2 favorites]
If you do this yourself, you're going to need to obtain and maintain a federal Employer Identification Number.
Second, doing this yourself may or may not save you any money. True, you'll save on administrative costs by doing things yourself, but payroll companies do more than just paperwork. They also generally provide insurance for both you and your employee. This costs money, but they get a volume discount that you won't be able to score.
Third, and in no small part due to the things listed above, this isn't a matter of simply punching in a few numbers on a glorified spreadsheet and signing the checks. Taking care of all of the logistical issues involved in employing someone legitimately is actually pretty time consuming; this is what HR departments do for a living. Granted, three people in HR may well be able to manage hundreds of employees, but your first employee will create far more new work than your second, or even your hundredth. Every two weeks you're going to have to spend at least an hour or two on paperwork.
This, as it turns out, is why people either use payroll companies or just pay their employees under the table: doing this yourself is a huge pain in the ass.
posted by valkyryn at 1:54 PM on April 5, 2009 [2 favorites]
I don't think this will save you any money. There are programs (e.g. Quickbooks plus their additional payroll module, which comes with varying levels of support) that will calculate payroll for you, but unless you know what you're doing, you're bound to make miscalculations, or fall behind, or otherwise make some sort of potentially expensive mistake. And it will cost you several hundred dollars just to get set up with one of those programs.
In addition to actually paying the caretaker the correct amount of money, you'll also need to submit federal withholding to the government monthly, file quarterly withholding reports, submit withheld state taxes monthly, file and pay any quarterly employer taxes (varies a lot by state). There's a handful of annual reports you need to file (summary reports, unemployemnt, etc.). Plus any additional items you need to consider like worker's comp, additional benefits, etc.
Don't do this yourself if you don't know what you're doing. Really.
posted by robinpME at 3:46 PM on April 5, 2009
In addition to actually paying the caretaker the correct amount of money, you'll also need to submit federal withholding to the government monthly, file quarterly withholding reports, submit withheld state taxes monthly, file and pay any quarterly employer taxes (varies a lot by state). There's a handful of annual reports you need to file (summary reports, unemployemnt, etc.). Plus any additional items you need to consider like worker's comp, additional benefits, etc.
Don't do this yourself if you don't know what you're doing. Really.
posted by robinpME at 3:46 PM on April 5, 2009
Another option is to hire a caregiver from an agency. You pay the agency, then they pay the caregiver and handle all the taxes, deductions and related paperwork.
posted by amyms at 4:18 PM on April 5, 2009
posted by amyms at 4:18 PM on April 5, 2009
There's no advantage to doing this yourself unless you REALLY REALLY want to; any amount you might save in costs is going to get eaten by things like subscriptions to services to update you when there's a law change. You also will have to meet certain requirements of a domestic employer, like providing a specific breakroom space with certain posters posted, etc. that you would not have to meet if you were paying a company to manage it for you, and you also might have to get and maintain certain types of liability insurance. The requirements get really ridiculous fast.
Beyond the federal EIN, you will probably need to get a state taxpayer ID and file state, regional, and other miscellaneous employment taxes like transit districts. Researching these taxes is often a pain in the butt because they're collected by different agencies.
I briefly employed three people in an office setting, and payroll took up literally 20 hours per pay period. Messing up any of these things in the slightest will very quickly bring enforcement or collection agencies down on your head. I once rounded incorrectly and had to go to a hearing downtown over something like thirty-seven cents. Three years after closing the business and moving halfway across the country, I still sometimes get mail requesting an audit or copies of records from the two years I was operating the business.
Don't do it. There's a reason these companies exist and the competitive environment keeps them, well, competitive.
posted by SpecialK at 6:01 PM on April 5, 2009
Beyond the federal EIN, you will probably need to get a state taxpayer ID and file state, regional, and other miscellaneous employment taxes like transit districts. Researching these taxes is often a pain in the butt because they're collected by different agencies.
I briefly employed three people in an office setting, and payroll took up literally 20 hours per pay period. Messing up any of these things in the slightest will very quickly bring enforcement or collection agencies down on your head. I once rounded incorrectly and had to go to a hearing downtown over something like thirty-seven cents. Three years after closing the business and moving halfway across the country, I still sometimes get mail requesting an audit or copies of records from the two years I was operating the business.
Don't do it. There's a reason these companies exist and the competitive environment keeps them, well, competitive.
posted by SpecialK at 6:01 PM on April 5, 2009
I work in this field directly, both as a parent of disabled children, and as a professional service coordinator for families with disabled children. One difference, though, is that I'm in Canada, so this may not fit.
Different families deal with this in different ways. Quicken with the payroll is a piece of cake as long as everything is fairly regular (eg. few people, regular pay etc.). It works really well for some families. Others pay an agency to do the payroll paperwork (it doesn't cost much if they're set up to do it), but still do the hiring and pay out wages themselves. Others hire their people through the agency and therefore the agency does the paperwork. I (and many other parents) won't do this because it doesn't give as much control over choice of staff, and I want my staff to feel like they're working for me and my family, not an agency. Also, the agency takes a cut off of the wages which is far more than the admin for payroll, so the person earns less. I would rather have the money going directly to the people doing the work, rather than their office admin.
posted by kch at 8:20 PM on April 5, 2009
Different families deal with this in different ways. Quicken with the payroll is a piece of cake as long as everything is fairly regular (eg. few people, regular pay etc.). It works really well for some families. Others pay an agency to do the payroll paperwork (it doesn't cost much if they're set up to do it), but still do the hiring and pay out wages themselves. Others hire their people through the agency and therefore the agency does the paperwork. I (and many other parents) won't do this because it doesn't give as much control over choice of staff, and I want my staff to feel like they're working for me and my family, not an agency. Also, the agency takes a cut off of the wages which is far more than the admin for payroll, so the person earns less. I would rather have the money going directly to the people doing the work, rather than their office admin.
posted by kch at 8:20 PM on April 5, 2009
« Older Something is in my attic... Help me figure out... | The noodles the internet forgot. Newer »
This thread is closed to new comments.
posted by Kellydamnit at 1:12 PM on April 5, 2009