6 Reasons to Opt for Payroll Outsourcing in 2024

If you do business internationally and need multiple currencies and global compliance, check out Rippling Global Payroll. Companies that outsource payroll can reduce the costs of managing and delivering employee compensation. Some outsourced payroll companies also offer human resources, which can streamline business operations. Those are both good ideas, but outsourcing will come down to your business needs. Payroll outsourcing certainly has advantages, but no single resource can point a company toward guaranteed success with payroll management. Company leaders should not take a decision about outsourcing payroll lightly but should understand its convenience and financial savings.

Payroll Expertise

In addition to running payroll, full-service providers typically help with tax reporting, regulatory compliance, data security and unemployment claims. An outsourced payroll company will need access to your business bank account and employee time tracking system. This requires trust between the company contracting the payroll service and the service itself. A legally binding service agreement outlining the payroll outsourcing company’s terms, conditions, and expectations solidifies that trust. Payroll outsourcing costs generally depend on payroll frequency, total number of employees and the specific services that are being outsourced. In most cases, there is a per-payroll processing fee and an annual base fee.

Key features of payroll solutions

1. Keep in mind, though, that the same concerns mentioned above also apply to software capabilities.
2. By outsourcing these payroll responsibilities to a service provider with localized specialists, your team will gain peace of mind and reassurance that you comply with international payroll and employment laws.
3. By outsourcing tasks, you can ensure your payroll is getting the attention to detail it requires to run smoothly.
4. Payroll outsourcing is transferring payroll tasks and responsibilities to a third-party payroll provider.

Thanks to Deel, the HR and Finance teams from SafetyWing have saved more than 30 hours a month on admin and $10,000 USD yearly. Processing payroll and maintaining compliance standards is difficult for overwhelmed payroll departments, especially if their organization is growing quickly. What kind of experience your staff has while working for you can have a major impact on some seemingly unrelated financial outcomes. For example, if turnover is high, you may have additional expenses tied to hiring, onboarding and offboarding staff. Other times, you can actually do something about it, if you can pinpoint what’s driving everyone out of their office chairs. The voluntary security and compliance standard SOC 2 is also recommended because it has clear guidelines on how to deal with sensitive data.

As another major player in the HR and payroll space, ADP’s offerings are narrower in focus than Rippling’s, but they gain in depth what they lose in breadth. This list will guide you through six of the top providers in payroll outsourcing and software tools, and we’ll offer advice on how to research and sift through your options to find the right one for you. Sometimes, you just need someone to take a few things off your hands. Business activities like running payroll are, obviously, a bit more involved and sensitive than, say, having someone run your personal mail to the post office. That said, at a fundamental level, outsourcing payroll or leveraging HR software solutions are in many ways the same as hiring someone to do your yardwork.

Review software alternatives before selecting an outside company to handle payroll and benefits. Doing business with someone you trust is important, so find a payroll company with a good reputation. If you’re co-sourcing, you’ll need a partner willing to share the workload. There’s no guarantee outsourcing will be cost-effective, but many companies choosing to outsource find it cheaper overall than keeping payroll management fully in-house. Hiring out the work can, when all goes well, provide significant advantages and cost savings. Once a business has hired its first employee, payroll responsibilities will continue every pay period as long as the business is in operation.

Tips For A Smooth Transition To Payroll Outsourcing Services

Bonus points if it comes with a cloud or mobile app that’s easy to use. There are plenty of features, functionalities and benefits that a given business might need from their payroll support vendor. We’ve focused on just a few, to highlight some of the most common (and most commonly needed) answers to HR and payroll pain points. You’ll also need to consider employee benefits, overtime, and security. Payroll requires sensitive employee information, and this needs to be protected.

Sometimes, the consequences of a payroll error are more severe than having an employee complain about a portion of money missing from their paycheck. Inaccurately filed federal payroll taxes may result in penalties and legal issues with local government agencies. For organizations, inaccurate data is the top barrier to effective payroll operations. A payroll provider’s sole responsibility is to ensure payments are made correctly and tax laws are followed. As a result, the chances of making a mistake are lower than with an in-house accounting team. If your business is growing, you need a payroll provider that can grow with you.

Employee Benefits

Businesses may choose to outsource all payroll functions or just a few, such as payroll taxes, garnishments, and wage payment through options like direct deposits. The decision to outsource may depend on the size and complexity of the business and its needs. For larger companies with more complex payroll needs, including notice to reader ntr compilation engagements having multiple employees in multiple states, outsourcing payroll often makes sense financially and operationally. But small to mid-size businesses may benefit from outsourcing payroll as well; after all, regulations around payroll often change, and staying up to date on requirements might present a significant challenge.

Many companies set up sub-accounts of their primary bank account to simplify the transfer of funds to cover payroll checks and direct deposits. Payroll companies employ advanced security measures to protect employee information. That includes maintaining confidentiality on issues like wage garnishment, payroll mistakes, and corporate tax filing.