Payroll and Tax Services

• Has your organization ever had to pay a penalty because a staff member thought it was okay to wait a day or two before going to the bank to make the payroll tax deposit?
• Does the year end throw you into a panic because all those tax forms need to get done?
• Do you need help understanding the notices that come with the quarterly tax reports?

If you answered affirmatively to any of these statements, it may be time to consider using an outside payroll service. The Maryland Nonprofit's endorsed vendor for payroll services is Automatic Data Processing (ADP). ADP is the county's leading payroll service with over 250,000 clients nationwide. ADP offers special pricing (at least a 20% discount) to Maryland Nonprofits members.

What does a payroll service do?

The employer supplies salary information, authorized deductions, hours, wages, and hours worked. The payroll service calculates the net amount of pay for each employee. Either a check is issued or a direct deposit is made to the employee's bank account. The payroll service will calculate, file, deposit and reconcile your federal, state and local, social security, Medicare and state unemployment taxes. Since in the State of Maryland, a member of the board of directors can be held personally responsible for unpaid payroll taxes, a payroll tax service can provide the intangible benefit of peace of mind.

Why should small agencies use a payroll service?

Even with one or two employees, there are many advantages to using a payroll service. One advantage is the use of direct deposit which can be an invaluable service to the busy agency employee. Direct deposit can also be a "life-saver" when the check signer is out of town or sick; employees still get paid. A major benefit is that the payroll service stays up to date on new regulations regarding payroll taxes. For instance, does the person currently preparing the payroll understand the changes in tax deposits that will occur over the next few years? ADP prepares and makes the tax deposits. The cost of just one penalty for late filing can be more than a year's worth of outside payroll processing.

Why should larger agencies use a payroll service?

Direct deposit capabilities and tax services benefit the larger organization as well the smaller agency. In addition, a payroll service can provide additional reports that allow the organization to allocate salaries to meet A-133 requirements. A payroll service also can maintain annual leave and medical leave records. ADP can also process payments to independent contractors and produce 1099s.

To receive more information about Maryland Nonprofit's payroll services plan, contact Nancy Hall by email or by phone at 410-727-6367.

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