There are many ways an employer can fulfill their obligation for paying employee wages, and deducting and paying that employee’s portion of local, state and federal taxes. The employer can process payroll manually, use payroll software or outsource payroll to a traditional payroll service. Or, the employer can use an online payroll service. An online payroll service provides a “software as a service” platform that allows an employer to enter payroll data into an online account, and the payroll service will calculate wages and deductions, and pay employees through direct deposit. A full-service online payroll provider will also take on the employer’s tax liabilities, paying and filing their taxes, and working with the IRS if any payroll tax issues arise.
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