Final answer:
Yes, payroll can be outsourced to third-party companies like ADP. These companies handle various payroll-related tasks, including tax calculations and submissions in accordance with federal, state, and local requirements.
Step-by-step explanation:
It is true that payroll can be done by a third-party company, such as ADP. Many businesses outsource their payroll processing duties to external companies due to the complexity of dealing with payroll taxes and the need for compliance with various tax codes. Payroll services offered by third parties typically include calculating employee pay, deducting appropriate taxes, and making sure that the taxes are paid to the correct authority on time. This can include managing federal, state, and local payroll tax requirements.
In the United States, employers and employees are both subject to payroll taxes, which require meticulous record-keeping and timely reporting. To ensure compliance with all relevant tax laws, many employers opt to use the services of a professional payroll company. These payroll companies are experienced in managing the complexities of payroll tax law, including the submission of quarterly and annual reports to various taxing jurisdictions.