When considering whether to outsource this function, the time and resources required to complete essential payroll tasks often weigh heavily in the decision-making process. By outsourcing payroll to a reputable provider, owners may have more time to focus on what matters most. In many cases, they’ll also have a variety of options available to maximize time saved throughout the pay period. Unless there are discrepancies or problems, payroll outsourcing service providers will likely only need to reach out once per pay period.
However, this cost reflects the wide-ranging HR services it offers. Full-service payroll companies have broad experience with running payroll and ensuring tax compliance for businesses. If you’re hiring internationally, look for a global payroll provider like Deel that can take on the responsibility of navigating unfamiliar payroll laws and best practices for you. The time employees spend processing payroll in-house and the salary of the payroll manager are costs. A small business can spend a significant portion of its revenue on those costs. Prices for some payroll services are as low as $40 per month to handle basic payroll functions.
Driving HR strategy for a future-ready business
Growing teams often forego traditional benefits like health insurance and the like because of the costs involved in paying for them at so small a scale. Even if the company does offer benefits, those have to be managed properly — preferably in tandem with payroll so there’s not a bunch of extra manual accounting labor. However, Bambee is better suited for small companies with simpler payroll cadences since it does not support employee self-service, time-tracking, or HR software integrations. You’ll likely need a more advanced platform with custom automations and support for international employees as your business grows and diversifies.
Follow this guide to learn more about payroll outsourcing and how it can benefit your business. Outsourcing payroll to another company can be a good move for lots of businesses. 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. A New York- or San Francisco-based company that keeps payroll in-house, for example, must pay “big city salaries” to attract the right employees for managing payroll, just like the rest of its internal workforce. If many hours of work can instead be assumed by third-party employees somewhere with a lower cost of living, the outsourced functions tend to become cheaper to perform.
Top benefits of outsourcing payroll services
Most small business owners in the United States don’t need to deal with international payrolls. If you expand your services or hire specialized workers outside the country, that could change. For example, 35 hours is considered a full-time workload in France. When a business hires someone else to help with payroll, they might pay a few different fees, depending on the payroll outsourcing services agreement. Some of these fees depend on how many people are employed by the business and the frequency of payroll periods.
- Run payroll around the world from one platform, streamline international operations, and eliminate the ongoing admin of local compliance, taxes, benefits, and more.
- In addition to running payroll, full-service providers typically help with tax reporting, regulatory compliance, data security and unemployment claims.
- Company leaders should not take a decision about outsourcing payroll lightly but should understand its convenience and financial savings.
Once you’ve determined your needs, explore plans that meet your criteria. Our experts at Paychex can help you determine whether outsourcing payroll makes sense for your business and which services to outsource for the best operational savings. You’ll need to understand what payroll functions you need and what you’ll get from the service.
Better experiences for scaling teams
Reputable payroll providers will have strong security systems and processes to ensure the safety and security of sensitive payroll data. Perhaps the most comprehensive HR and workforce management provider in the list, Rippling is a juggernaut in the industry (and rightly so). Outsource some or all HR tasks and opt for a partner that is an extension of your current HR staff. We can handle hiring, engagement, employee issues, payroll, benefits, compensation, talent, compliance and more. When you’re dealing with payroll across different countries, rules can vary massively, including regulations tied to wages, overtime, taxes, social security, negative confirmation and data protection.
Today’s payroll processes can be time-consuming and stressful, which is why 73% of organizations have turned to payroll outsourcing. For smaller businesses, outsourcing payroll through a payroll solutions software solution will almost always be cheaper than DIY solutions. Paying international freelancers is more complicated than paying domestic W-2 employees, and not every provider can, well, provide that. So start by clarifying what you need in this category, then build from there.
When analyzing cost, it’s important to remember that outsourced payroll has a knock-on effect. It removes payroll tasks from your team’s plate, allowing you to generate value elsewhere. This is a process fraught with potential pitfalls, especially if you don’t have the resources to bolster your security accordingly. With the right payroll partner, you can be sure that your employee data is safe and secure under the latest standardized protocols, and that your payroll runs are being monitored for potential instances of fraud. Wherever money is being handled and transferred between two parties, there’s always the risk of fraud.