Whether you’re looking to save some extra time or are interested in additional HR features, outsourcing your payroll could be the right choice for your small business. And what are the pros and cons of taking this step for your business? Follow this guide to learn more about payroll outsourcing and how it can benefit your business. To help keep up with your growing business, you might consider outsourcing payroll to shift some responsibilities off your plate, allowing you to spend time on other crucial business tasks.
Outsourcing gives your business the chance to grow and scale until you’re ready to commit to the expense of in-house employees. For your transition to go smoothly, it’s advisable to implement a plan. Set up a timeline, figure out who’s responsible for what, and highlight the key milestones in the process. To make your life significantly easier, you’ll want to use a payroll platform that can integrate seamlessly with your existing HR tech stack. Ideally, there will be an API option, too, so that you can customize your integrations.
When selecting an outsourced payroll provider, consider your budget, expansion goals, and payroll team’s bandwidth. 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. Whether you’re running payroll domestically or internationally, you must ensure you’re operating in compliance with the employee’s payroll laws. Paychex solutions help with HR challenges faced by businesses with employees, such as payroll, employee support, compliance issues, etc. Paychex’s small business solutions are customized for businesses with 1–19 employees to help you save time, cut costs & comply with government regulations.
- This specialized technology is costly for an individual business to develop internally.
- But it’s important to carefully research the outsourcing process, understand your tax obligations, and fully vet any company you’re considering as a third-party payroll processor.
- Payroll requires sensitive employee information, and this needs to be protected.
- That can be especially helpful for businesses with complex needs.
- The business needs to do that every pay period if you’re actively recruiting.
Is outsourcing payroll cost-effective?
The business needs to do that every pay period if you’re actively recruiting. 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.
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While it pales in comparison to the payroll software capabilities of competitors like Rippling, BambooHR and ADP, its services are arguably more personalized. This is because Bambee adapts its service needs to your business by assigning you a dedicated HR manager who creates payroll procedures unique to your business. Paychex is yet another top name in payroll software, support and outsourcing.
Special considerations for international payroll outsourcing
If you don’t have the funds for new infrastructure and full-time payroll staff, outsourcing can help you avoid a big financial outlay. This can be a tricky thing to assess, especially if you’re looking for payroll partners in new markets. Where possible, do your due diligence and find out as much as you can about your potential partners.
Paychex Flex® Makes It Easy
Read up on this and other regulations that affect how you pay your employees. Outsourced payroll companies typically offer online portals where employees can view their take-home pay, benefits, and tax deductions. Directing them there rather than to a live support center is a great way to reduce corporate spending. “Payroll co-sourcing” describes a hybrid model in which some elements of the payroll process are hired away while others are completed in-house.
Payroll errors can be costly, and serious ones can even shut a business down. Payroll services can provide the expertise and resources you need to do it right. For the best results, find a payroll software solution that doesn’t take much work to put the system in place. Bonus points if what is a setup charge it comes with a cloud or mobile app that’s easy to use. The price of payroll outsourcing is usually transparent, with a flat monthly rate. There are pros and cons to outsourcing, and the right choice will depend on your unique business goals.