Payroll Agreements

Payroll agreements, also called payroll processing agreements or payroll services agreements, are agreements made between an employer and a payroll services company. A business hires a payroll company to handle payroll procedures for the business.

Purpose

A company that wants to outsource its payroll function hires a payroll company to handle some or all of those needs. The agreement might be for all payroll services or just for a portion of the services, such as payroll tax deposits.

Features

Payroll agreements specify the tasks for which the payroll company is responsible. Payroll companies typically provide services that include calculating and printing paychecks, performing direct deposits, handling payroll tax calculations and payments, preparing payroll reports, and calculating vacation pay, savings plan calculations and garnishments.

Details

A payroll agreement contains the date and the names and addresses of the payroll company and the company hiring it. The agreement also specifies the procedures for which the company is being hired, the costs involved, indemnity clauses and signatures of both parties.

References

• Pay It Services: Payroll Processing Agreement
• Columbia: Payroll Services Agreement
• Pacific Northwest Tax Service: Payroll Service Agreement