5 Common Misconceptions of a Midyear Payroll Switch

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Are you dissatisfied with your payroll provider but worried about the complexities of switching to a new one? Many businesses believe the only time they can change payroll providers is the end of the calendar year and running their first payroll in January. The truth is, the middle of the year can also be a great time to make a change. 

Below, we debunk five common misconceptions regarding a midyear switch:  

1. You cannot switch payroll providers midway through the year. 

You can actually change payroll providers at any time of the year. Some companies prefer to switch midyear when team members are out of the office and the business is running at a slower summer pace. The right payroll provider will be able to guide you through the process smoothly and efficiently, with minimal disruption to your day-to-day operations. 

2. Your payroll data could go missing or have errors. 

Discovering data errors in your system is beyond frustrating, especially when you are fed up and ready to move to a new solution. It is essential to fix these errors prior to bringing on the new provider. To make sure to avoid future data errors, have your provider perform an assessment of your payroll history. This will allow you to ensure your data is error-free and your new partner receives accurate data. From there, they will determine the next steps in your payroll conversion process. 

3. You could lose all your payroll history. 

If you’re switching payroll providers midyear, all your payroll history for the current calendar year by employee can be brought into the new system. In addition, you can also bring in historical employment data from the past years. 

It is important to note, as an employer, you must keep records used to calculate pay, including hours worked, total wages per pay period, date of payment, payment basis, and additions or reductions in wages. This information is required to be kept on record for at least three years to comply with the Fair Labor Standards Act. The IRS requires payroll records related to employment taxes to be kept for at least four years, and some states have even longer requirements. 

4. Complex payroll taxes can lead to potential heavy fines and penalties. 

Your new provider can guide you through the process of migrating your tax history and help ensure your taxes are administered seamlessly going forward. Assessing your previous quarter’s taxes ensures your payments are correct and up-to-date. 

Our payroll pros take on the back-office tasks of accurately calculating and depositing your payroll taxes, as well as remitting your tax filings on time. We support you with automated processing, federal compliance and effortless tax filing. This allows you to focus on your business while we handle maintaining compliance and reducing your company’s risk. 

5. Employees will get two W-2s. 

You will need to provide your new provider with year-to-date employee payments. The historical information should include the detailed payroll records for each employee for the current year starting January 1 until your go-live date with the new provider. This ensures your new provider has accurate pay information for the entire year, so they can create accurate W-2s for your workers. 

Ready for a Midyear Switch? 

If you’re considering a new payroll provider, evaluate the impact it will have on your business if you decide to make the switch now or wait until the new year. If you are experiencing payroll mistakes, seeing fees on your invoices or just not getting the customer support you need from your vendor, now might be the most ideal time. Transitioning to a new, more reliable payroll system will help your business operate more efficiently while guaranteeing all workers are paid on time. 

We understand that payroll is a complex process and there can be many potential challenges when you are looking to switch systems. Our payroll pros take the time to learn the unique payroll and workforce challenges your business faces to pair you with the right dynamic software solution to scale with your growth. But we don’t stop there. No matter what time of year works best for you, our payroll pros are here to make your payroll and workforce management easier. 

Ready to put this brain power to work?

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