Q1.  What options does the public charter school have for setting up a payroll system? 

A1.  Several options exist for paying employees of the school.  They include:

• contracting with a local school district, SAU or area business,

• hiring a part-time bookkeeper or payroll/benefits professional,

• outsourcing these functions through a payroll or human resource management service.

Q2.  What are the required first steps in setting up a payroll system?

A2.  You must:

·        obtain an Employer Identification Number (EIN),

·        set up one or more checking account,

·        register with the state's Employment Security office, as a small, chartered public school (must be within 30 days of your first pay to employees). 

Q3.  What should public charter schools look for when considering a payroll system?

A3. 

• Cost effectiveness—compare services and costs,

• Location of a payroll provider--you may want to be able to drive to the office,

• References—you need to know that the business is efficient and responsive to concerns.

• Provisions of the contract--you need to know the basic parts of the arrangement, who is responsible, how will money be transferred or accessed, how will information be shared confidentially, is the organization insured, etc.
   

Q4.  What services do payroll companies offer?

A4.  While product offerings vary between companies, payroll service providers generally offer the following services your public charter school will need: 

• payroll processing (paychecks and deductions),

• direct deposit, if desired,

• tax withholding accounts for employees,

• quarterly and annual tax statements to employees,

• W-2 and 1099 required employer annual tax statements,

• payment to independent contractors, according to employer agreements,

• enrollment in benefit programs,

• section §125 tax-deferred contributions (e.g. health premiums, retirement contributions),

• payments to flexible spending benefits accounts.

Q5.  How much do payroll companies charge for their services?

A5.  Prices vary based on the frequency of the payroll (how often it runs), the number of

Employees being paid and the features selected to be implemented by the payroll services.

For example, one school may want direct deposit services; another may want to handout paychecks.

Frequently, payroll service companies have a menu of choices and their fees reflect choices made.

In Massachusetts, the average mature charter school has approximately 40 full- and part-time employees and payroll service costs A cost estimate, based on straight payroll and direct deposit, including tax withholding but not benefit payments would range from $10-20/employee per month or $200/year per employee, on average. A new school with 10 or less employees and consultants would likely cover their annual payroll costs for approx. $2,000.

Q6.  Where do I find local payroll companies?

A6.  Some Internet sites (such as www.buyerzone.com) allow organization representatives to submit requests to multiple vendors, who will then contact you directly.  Checkmate Expert Payroll (603) 225-2004 and ADP (800) 225-5237 both have regional offices throughout New Hampshire.

For ease of making an arrangement without delay, our office has interviewed a company willing to work with charter schools in New Hampshire for a fixed rate not to exceed $2500 per year. Please contact susan@nhschoolreform.org for more information.

Q7:  What terms describe services that cover more than just "payroll?"

A7:  Two phrases are used for more comprehensive services:

1)  "BPO" or "Business Process Outsourcing" = a company processes all the payroll as well as process, reconcile, and pay all benefit programs (full benefit administration services), and provides complete human resource services

2)  Human Resource Outsourcing = essentially means the company is the human resource office for the school whereby anyone can contact the organization for information, training, policies, records management, etc., as if this were the school's own human office office,

3)  "PEO" or  "Professional Employment Organization" = a company that handles all the pay and benefit processing and actually hires the staff and offers benefits themselves so that employees are under the EIN of this company and not the school