Running Payroll for a Single Employee: 4 Options for Employers

Navigating salary disbursement, tax obligations, and compliance requirements can be a daunting task. Employers have a few different options: run payroll themselves, partner with a professional employer organization, partner with a simplified payroll solution like Justworks Payroll, or partner with a global EOR for international. 

How to run a DIY payroll for one employee 

Running single employee payroll by yourself can present many unique challenges. With no dedicated HR or payroll department to handle the process, you bear the responsibility of accurately calculating wages, withholding taxes, and ensuring compliance with employment laws and regulations. 

Additionally, managing payroll software or paperwork and staying updated on tax changes can be time-consuming. Moreover, the risk of errors increases, which could lead to penalties or disgruntled employees. Despite the simplicity of having just one employee, handling payroll independently demands attention to detail and a thorough understanding of payroll procedures.

How a PEO can help manage single-employee payroll in the US 

A PEO can be a valuable ally for managing single-employee payroll in the US, offering a range of benefits to streamline the process and enhance overall efficiency. 

Here's how a PEO can assist in managing payroll for a solo employee:

1. Tax compliance: PEOs specialize in understanding tax regulations and updates. By partnering with a PEO like Justworks, a business can ensure accurate and timely tax filings for their single employee, minimizing the risk of compliance issues.

2. Payroll processing: PEOs provide dedicated payroll processing services, handling tasks such as paycheck calculations, direct deposits, and managing payroll schedules. 

3. Employee benefits administration: Even with just one employee, accessing benefits like health insurance or retirement plans becomes simpler through a PEO. PEOs often offer a suite of benefits that small businesses may find challenging to provide independently.

4. HR support: PEOs usually offer HR support, assisting with employee onboarding, maintaining personnel records, and providing guidance on HR compliance matters. This can be particularly helpful for business owners focusing on their core operations.

5. Risk management and compliance: PEOs take on a portion of the employer's responsibilities, including certain legal and compliance aspects. This can alleviate the burden on business owners. 

6. Efficiency and time savings: By outsourcing payroll responsibilities to a PEO, business owners can save valuable time and resources. This allows them to concentrate on growing their business while the PEO handles the intricacies of payroll management.

7. Scalability: As the business grows and potentially hires more than one employee, the PEO's services can scale accordingly. This flexibility is advantageous for small businesses looking to expand without the need for significant adjustments to their payroll management.

How a payroll solution can help

For single-employee payroll needs, a dedicated payroll solution like Justworks Payroll offers a streamlined and efficient alternative to managing payroll independently or investing in a full-fledged PEO. With features such as automated calculations, tax filing assistance, and direct deposit options, payroll solutions alleviate the burden of manual payroll processing and ensure accuracy and compliance. 

They often come at a fraction of the cost compared to comprehensive PEO services, making them a cost-effective choice for small businesses with limited payroll requirements. By leveraging a payroll solution, businesses can focus on core operations while still ensuring seamless and hassle-free payroll management for their single employee.

How an EOR can help with single-employee payroll internationally

EORs can be an invaluable resource for managing single-employee payroll on an international scale. 

Here’s how an EOR can assist in paying one employee: 

1. Navigating local labor laws: EORs have expertise in the labor laws of the countries they operate in. They ensure that payroll complies with local regulations which is crucial for international employment to avoid legal pitfalls.

2. Handling tax obligations: Understanding and managing tax requirements in different countries can be complex. An EOR takes care of calculating and remitting taxes according to the local tax laws, relieving the employer of this daunting task. 

3. Currency and exchange rate management: EORs handle the payment of salaries in local currencies, dealing with the complexities of currency conversion and exchange rate fluctuations. 

4. Streamlined Payroll Processing: Similar to domestic PEOs, EORs manage the payroll process for a single-employee, including setting up payroll schedules, processing payments, and issuing payslips, ensuring that the employee is paid correctly and on time.

5. Benefits administration: EORs can administer employee benefits as per local standards, including health insurance, retirement plans, and other statutory benefits which might be challenging for an employer unfamiliar with the local benefits landscape.

6. Compliance and risk management: EORs manage compliance with local employment laws and regulations, reducing the risk of non-compliance for the employer. 

7. Employment contracts and documentation: They assist in drafting and managing employment contracts that comply with local laws, including work hours, leave policies, termination conditions, etc.

Justworks can help manage single-employee payroll

Small businesses owners managing payroll for a single-employee are bombarded with a long list of steps and expectations that may be difficult to navigate without a lot of resources. 

Managing payroll for just one employee doesn't have to be a complex or time-consuming task. With Justworks’ PEO, Payroll, and EOR services, you can streamline your payroll process effortlessly. Whether you're operating domestically or internationally, we've got you covered. Get started today!