The next time you’re waiting in line at a drive-thru, think about what it takes to keep the restaurant running. Between employing its staff, serving affordable food and keeping the lights on at odd hours, there’s a lot that can eat into an establishment’s profits.
Due to their sheer number of locations and abundance of entry-level jobs, fast-food restaurants are uniquely poised to take advantage of the Work Opportunity Tax Credit (WOTC). Or they would be if their payroll and tax credits software worked together seamlessly.
As a Kansas-based food franchise grew out of its home state, the company’s chief financial officer (CFO) saw a clear opportunity to make the most out of its hiring practices. Unfortunately, a drawn-out process with its previous tax servicer forced the franchise to routinely leave money on the table.
“We’d have to provide the third-party provider with a lot of data once applicants completed the pre-hire documents for credits,” the CFO said. They had a potential for meaningful WOTC breaks given “1 in 4 new hires” were eligible. All the company needed was a tax credits service that could scale with its rapid expansion.
How does the right tax credits software help fast-food franchises?
The CFO chose Paycom after seeing how its tax credits software integrated with every other HR tool the company needed. Like adding bacon to a mouth-watering cheeseburger, checking employees’ WOTC eligibility is cooked into the company’s preboarding process.
After a job candidate provides their basic info, the business receives an instant potential-eligibility notification for credits. From there, all HR needs to do is provide Paycom’s Tax Credit department with the appropriate data for processing. And if credits aren’t discovered, the company pays nothing for the service.
But according to the CFO, the franchise has already secured a lot more than nothing.
“Some of our restaurants operate all year and won’t make a profit of $100,000,” the CFO said. “What we annually qualify for in tax credits is more than the equivalent of one of our restaurants working 12 months.”
With Paycom, the company has secured over $447,000 in federal tax credits. That’s the equivalent of selling roughly 5.5 million burgers. While that’s a lot of beef, the impact Paycom has helped make on the franchise’s bottom line is no bull.