The Benefits of Using Payroll in Your Spa: Everything You Need to Know

Are you considering integrating spa payroll into your business operations? As a seasoned beauty and wellness professional, you probably recognize its importance but might find the reasons why a bit unclear. Fear not! From legal compliance to financial finesse and operational efficiency, let’s explore why payroll is a must for your spa and how you can seamlessly implement it into your current workflow.

Worry-free Compliance

Consistently and accurately running payroll is key to your spa effortlessly sailing through tax and labor laws, with no worries about missing deadlines or calculating deductions incorrectly. It ensures you stay on the right side of the law by handling federal, state, and local taxes promptly and accurately. Plus, it keeps you in tune with hourly regulations, including those for benefits like health insurance and retirement plans. Here’s a closer look:

Tax Obligations:

Properly running payroll ensures that all federal, state, and local taxes are accurately withheld and paid on time—including things like income tax, Social Security, and Medicare.

Wage and Hour Laws:

Payroll helps maintain compliance with wage and hour laws, including minimum wage, overtime pay, and recordkeeping requirements, which are crucial for both full-time and part-time employees at your spa business.

Streamlined Financial Planning

It’s pretty clear why running payroll at your spa is advantageous for compliance reasons. Now, imagine having a clear view of your labor costs, effortlessly budgeting for the future, and managing cash flow like a pro. Payroll offers just that! With a streamlined payroll system in place, you can ensure consistent payments to employees and tax authorities, all while keeping your finances in check.

Budgeting:

Running payroll at your spa provides clear visibility into current and potential labor costs, which is crucial for budgeting reasons and projecting upcoming or uncertain seasons for your business.

Cash Flow Management:

Regularly processing payroll at your spa can clear up any ambiguity regarding your daily cashflow since it allows you to schedule regular payments to employees and tax authorities—which also helps you future-proof your budget. Not to mention, implementing something like direct deposit can further streamline cash flow management at your spa since payments to employees are timely, efficient, and never unaccounted for—which also means:

Happier Workplace & Employees

Happy employees, happy spa! Timely and accurate payments not only boost job satisfaction but also translate into stellar service for your clients. Plus, transparent pay stubs further enhance understanding and appreciation among your staff. Here’s how it works:

Timely Payments:

Keeping employees paid accurately and on time enhances job satisfaction and reduces turnover. Efficient employee payroll processing contributes to timely payments and satisfaction. Satisfied employees are more likely to provide excellent service to clients, too, elevating overall business performance, but more on that in a bit.

Employee Benefits:

Managing payroll allows for accurate deductions and contributions for employee benefits such as health insurance, retirement plans, and paid time off (PTO). Offering things like these as a spa or wellness business owner can be incredibly enticing to future employees, and help your spa stand out among competitors when they’re searching for a place to work!

Transparency:

Clear and detailed pay stubs help employees understand their earnings, deductions, and benefits, which establishes a line of trust and sincerity between you and everyone employed at your spa. It’s no doubt that the happier and more content your employees are with their career and workplace, the more efficiently your spa’s going to operate, but this final benefit to running payroll at your spa allows you to take it a step even further. How exactly? Read on for the explanation!

Ultimate Operational Efficiency

Automation:

Most payroll software or services automate repetitive tasks, reducing the time and effort it’d require you to manage payroll manually. By automating elements of the payroll process, you can efficiently track employee working hours, calculate taxes and deductions, and potentially integrate with other business systems. Automating payroll processes can also simplify overall payroll management and help ensure compliance with government regulations like we discussed earlier.

Accuracy:

Online or automated payroll systems also reduce the risk of errors in calculations and record keeping since you’re not required to crunch any numbers yourself. This is especially beneficial for enterprise businesses or those of you with numerous employees.

The 2 Most Common Ways to Run Payroll

Having now fully explored all of its benefits, here's how spa owners can implement payroll at their spa!

Payroll Software:

While there are plenty of spa payroll software options out there for businesses, it’s important to consider exactly what it is you need it to do for you. Keep things like the number of your current employees, if the software is scalable, and your budget in the forefront of your mind when searching for the right payroll software. With a clear grasp of these aspects, you can confidently choose payroll software that meets your spa's specific needs. Some payroll software options also offer features like online booking & payments, or even payroll reports, which can streamline your overall business operations. Since a majority of online solutions out there provide some type of free trial period, too, you can test out what works best for your business before making a final decision, which can be helpful if you're a small business owner or don't have many employees just yet!

Payroll Professionals:

Enlisting the help of a payroll professional can be a preferred choice by business owners since it offers a human element to a process that’s certainly a touch overwhelming at times, even with the help of a designated payroll software. Outsourcing payroll can save time and ensure compliance with complicated payroll laws, too, allowing you to focus on running your business. It’s that same human aspect, however, that often makes this route a tad more pricy than others, with prices starting at an average of $4 to $6 per employee per month for an external payroll professional. In-house payroll assistance can be even more costly since you’re paying a part-time salary, with prices averaging around $20,000 to $45,000 per year.¹ Of course, the final price depends on your locale and the specific professionals whose help you enlist, but a quick web search can help you get started!

As the reasons for running payroll at your spa business continue to grow, choosing the right method can be challenging. Now, you’ll have a clearer understanding of what to look for in a payroll service and why maximizing its potential is essential for your spa business’s long-term success.

If you’re in search of a business management software with an included payroll solution that can flex, scale, and grow with your vision, consider a complimentary 30-day trial with Vagaro. We back your success at every step.

Sources:

1. https://startups.co.uk/people/payroll/payroll-service-prices/