GoKawiilMost small businesses care about compliance, but often don't have a dedicated HR department or payroll administrator to manage it. By the time something surfaces, the original mistake might be months old.
Julie Loe didn't realize anything was wrong until the tax notices started arriving in her mailbox. She runs Pediatrics Physical Therapy Services in Morro Bay, California -- a small healthcare practice built around helping kids. Her payroll provider was supposed to handle tax filings, so where was all this paperwork coming from?
By the time she realized what was happening, the errors had rolled over into the next quarter -- turning routine tax payments into alarm bells. Julie had been proactive in hiring an online payroll service, but the system she trusted quietly let her down.
Her story isn't unusual. According to a KPMG report, payroll errors can cost a business up to 5% of total payroll spend. For a company with 15 employees averaging $50,000 in salary, that's nearly $40,000 a year leaking out through mistakes that are almost always avoidable.
That's the gap OnPay was designed to close: a payroll and HR platform built specifically for small businesses and the accountants who advise them, with automation and expert support to catch issues before they escalate.
Starting a business without a safety net
Before opening The Wizard of Paws Pet Salon in Sammamish, Washington, Sheila Cole rarely thought about payroll. Working 18 years as a groomer in other people's shops, she often dreamed about what she'd do differently when running her own. But the moment she became an employer, back-office tasks took over. Suddenly, she was responsible for W-2 filings, tax withholdings, and worker classification for a team of nine -- not something most business owners pick up overnight.
"I am terrified of the IRS," Sheila tells OnPay, "and I wanted to make sure when starting the business, I did everything right."
Being cautious goes a long way. Misclassifying a worker as an independent contractor when they should be an employee is one of the most common and costly payroll errors a small business can make. The IRS, the Department of Labor, and state agencies all treat it seriously, and penalties can include back taxes, interest, and fines.
Instead of becoming a compliance expert, she needed tools to automate it all. Whether paying full-time W-2 employees or 1099 contractors, OnPay allows her to manage everyone from the same dashboard. Coupled with built-in e-signatures and digital onboarding to walk new hires through every required document, such as W-4s and I-9s, it was one less thing to worry about.
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