You may need to supply specific tax forms and other necessary information about workers, like their Social Security numbers or Tax Identification Numbers (TIN). If outsourcing payroll seems like the best next step for your small business, consider using payroll software. With payroll software, you can easily integrate with your current operations, automate your payroll process, and access 24/7 support from payroll experts.

Track and manage time

A professional payroll company employs individuals who know payroll processing inside and out. These individuals specialize in the complexities of payroll processing and taxes. Below are some common advantages of outsourcing payroll services, areas of your business where a provider may be able to help, and how this approach could make sense for your business.

As a result, the chances of making a mistake are lower than with an in-house accounting team. If a provider handles payroll data for employees in the European Union (EU), they have to meet General Data Protection Regulation (GDPR) standards. Your provider should also have a data processing agreement (DPA), which outlines how the parties will process and store your data in compliance with the GDPR. This includes appropriate security policies, encryption, physical data protection measures, and risk assessments. Rather than an in-house payroll or HR professional, team manager, or small business owner handling payroll themselves, a third party takes care of the logistics.

Of course, very few business changes come without any downsides at all, and there are a couple to watch out for debit memo in accounting when considering potential payroll partners. Choose to partner with ADP as a professional employer organization (PEO) for full outsourcing. Gain dedicated experts and powerful technology for HR and Payroll plus Fortune 500®-caliber benefits, workplace safety, and workers’ compensation claims assistance.

Two outsourcing options: Get what works for you

If you are looking to outsource Paychex can help you manage HR, payroll, benefits, and more from our industry leading all-in-one solution. While occasional errors are bound to happen, payroll experts are also particularly good at verifying accurate data, finding mistakes, and net accounts receivable correcting them before penalties or fines are assessed. One of the biggest issues for payroll clients is hidden fees and “sneaky” costs. As well as being dishonest, these costs can wreak havoc with your hiring budget. As discussed, non-compliance — whether accidental or otherwise — can land your business in hot water. By outsourcing your payroll, you can streamline your operations, reduce administrative burden, and gain access to expertise.

Reduce costs

If you proceed to a demo or sales pitch, ensure you clarify the vendor’s model, too. Find out as much as you can before committing and ask questions if you need to. No matter how many employees you’re calculating payroll for, it’s easy to make mistakes or run into delays. And when you add new jurisdictions, you multiply the level of complexity of each payroll run. It automates calculations, tax withholdings, and pay distributions, but you’re still in charge of overseeing the process.

1. Handing your payroll over to third-party providers means trusting them with sensitive data, including your employees’ details, tax information, and even their attendance records.
2. Outsource some or all HR tasks and opt for a partner that is an extension of your current HR staff.
3. A solid understanding of payroll outsourcing’s pros and cons, along with accurate information on existing payroll management costs, can offer helpful guidance.
4. As mentioned before, these are further areas where a misstep by a payroll outsourcing provider can become a problem for both the provider and the client company.

Like with any business decision, you’ll want to know how your business will benefit if you decide to outsource your payroll. Now that you know what outsourcing the payroll process entails, let’s look at the wide range of payroll outsourcing benefits it can provide for you and your business. There are pros and cons to every business decision and payroll outsourcing is no different. Before partnering with a full-service payroll provider, employers should make sure the vendor is capable of meeting all of their requirements and has a reliable track record. When you outsource to a global payroll specialist, you also avoid other potential costs due to noncompliance, such as miscalculated overtime or an incorrectly submitted tax form.

As with any business decision, it’s up to you to decide whether or not the pros outweigh the cons when looking to improve your current payroll processes. According to Technavio, the payroll outsourcing services market is estimated to grow nearly 6% by 2027. Follow this guide to learn more about payroll outsourcing and how it can benefit your business. Choose how to price business services an efficient payroll management solution like Remote and avoid any major issues.