The Differences Between Working with a CPA and a PEO for Payroll Needs

As more employees are hired, payroll management can become time-consuming and complicated. Here are the Differences Between Working with a CPA and a PEO for Payroll Needs.

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Small business owners wear many hats, often starting off managing their own HR needs, including payroll. As the company hires more employees, payroll management can quickly become a time-consuming process that requires a certain level of expertise. This is why many business owners decide to hire help to manage their payroll needs. Two common options are working with a Certified Public Accountant (CPA) or a Professional Employer Organization (PEO). In this article, we will discuss the differences between working with a CPA and a PEO for payroll needs.

CPA versus PEO

A CPA is a licensed professional who is trained in accounting and financial management. Businesses hire CPAs for help with a variety of financial tasks, including tax preparation, auditing, and payroll management. When working with a CPA for payroll needs, the business owner will typically provide information to the CPA, who will then process payroll, calculate taxes, and create necessary reports.

A PEO is a business that offers full-service HR outsourcing known as co-employment. Through this partnership, the PEO performs various employee administration tasks, including payroll processing, tax calculations, and reporting.

The Differences Between Working with a CPA and a PEO for Payroll Needs

  1. Level of involvement

One of the biggest differences between working with a CPA and a PEO for payroll needs is the level of involvement required from the business owner. When working with a CPA, the business owner usually needs to provide all of the necessary information, including employee data, hours worked, and tax information. The CPA takes the information and does the work and then hands it back to the business owner to review and approve the payroll before it is processed.

When working with a PEO, the business owner can be much more hands off in the payroll process because the PEO will handle all of the necessary tasks, including collecting and inputting employee data, calculating taxes, and paying employees. The business owner will still need to review and approve the payroll, but the level of involvement required is typically much lower than when working with a CPA.

2. Cost

Another difference between working with a CPA and a PEO for payroll needs is the cost. CPAs typically charge an hourly rate for their services, which can vary depending on the complexity of the payroll and the amount of time required to process it. PEOs, on the other hand, typically charge a flat fee based on the number of employees and the level of service required. The flat fee can make it easier for businesses to budget for their payroll expenses and it can also be more cost-effective for businesses with a larger number of employees.

3. Who they serve

Both CPAs and PEOs are trained professionals who are knowledgeable about payroll processing and tax regulations but each may be best suited to serving different types of businesses. PEOs may be better suited for small to medium-sized businesses that need a more comprehensive HR and payroll solution while CPAs may be better suited for businesses that require more specialized services, such as tax planning or auditing.

Deciding who to work with

Both CPAs and PEOs can provide valuable services for businesses who need help with their payroll. If you’re debating whether to hire a CPA or partner with a PEO for your payroll needs, you will want to identify your payroll requirements and factor in your budget and the level of involvement you wish to have in the process.

Makai HR offers dependable payroll services for small businesses

Makai HR makes payroll easy with our end-to-end payroll support. Increase operational efficiencies, streamline FLSA and ACA compliance and save on costs with our integrated and included time and labor solution.

Our payroll services include:

  • Convenient pay options including direct deposit, VISA Paycards, and paper checks
  • Mobile app
  • PTO request management
  • Advanced scheduling
  • Job costing
  • GPS location validation
  • Timesheet entry
  • Break tracking
  • Payroll processing
  • Tax withholding, submission, & reporting
  • W-2 processing & delivery
  • Integrated time & labor solutions
  • Variety of clocking options for timekeeping needs

Contact us today to book an intro call.

Partnering with Makai HR

We are proud to be named to Hawaii Business Magazine’s 2023 Best Places to Work and Pacific Business News’ 2023 Hawaii’s Best Workplaces list. If you’re looking for comprehensive HR solutions for your business, we’ve got you covered through HR outsourcing.

When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. You also gain peace of mind that you are compliant with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long and changes happen). When choosing a PEO to partner with, there are many things to consider including cost, services, and technology solutions. 

With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our customized PEO solutions are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet, or phone. We can truly improve your employees’ work benefits while freeing you up to operate your business.

What are you waiting for? Companies that partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!

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