Even a company with fewer than five employees can benefit from outsourcing its payroll. But before you hire a payroll service, take these smart steps:

Check out the service's reputation. Ask for references from clients, accountants and bankers.

Ask about the specific services available. Some companies help with payroll deductions and direct deposits.

Make sure the service knows about all the federal and state government requirements and regulations. Good services give you brochures to keep you informed.

Rates are based on the number of employees you have and how often they're paid. It costs more to handle weekly payrolls than biweekly ones.

Still hesitating? You can handle payroll yourself with special payroll software, but then it's your responsibility to keep up with changing regulations.