How do payroll service providers ensure compliance with tax laws?

Payroll service companies get the most recent tax rules to process payroll with federal state and local regulations in place. These services process payroll tax deductions for you while doing all necessary filings and creating tax reports such as W-2s and 1099s. PSPs track both new tax laws and changes in withholding tax rates briefly they update their payroll to meet federal local and state tax requirements properly. Through payroll outsourcing companies avoid breaking employment laws which protects them from paying financial penalties