The Top 5 Benefits of Outsourcing Your Payroll

best integrated HR and payroll software

Outsourcing payroll has become more popular than ever. Businesses of all sizes are opting to outsource their payroll tasks, leading to greater accuracy, increased compliance, fewer errors, more savings, and a lot less stress.

Payroll outsourcing involves using a third-party provider to carry out your payroll tasks. This includes automatically processing payroll calculations, processing tax payments, paying employees, filing deadlines, and dealing with deposits and withdrawals. 

If you’re ready to start comparing payroll providers, use our free quote tool to receive tailored, no-obligation quotes from trusted suppliers chosen to match your specific requirements.  

Benefits of outsourcing payroll:

  • More free time 
  • Reduced staff costs and training
  • Minimised risk 
  • Strengthened security 
  • Integrated HR solutions 

Read on as we dive into how your business can benefit from choosing to outsource your payroll. 

1. Free up your time 

Time is money, and running payroll in-house will cost you more than your coin. The time you’d spend carrying out payroll tasks, staying compliant with ever-changing laws, and ensuring complete accuracy can be spent on other areas of your business – this highlights how outsourcing can help your business in this case.

Having extra man-power and hours to focus on more important tasks can speed up productivity and efficiency, and boost profit. It’s a win-win situation. 

2. Reduce staff costs and training

Running payroll in-house means you’ll need to pay dedicated staff to deal with payroll, and you’d have to arrange training, which can also rack up costs and eat up time. As your business grows, you’ll need to expand your payroll team, increasing costs and risk. If you run a small business, you may not have dedicated payroll staff, so another employee will need to be trained to carry out payroll duties. This can be expensive and stressful, and take their focus away from other important work.

Outsourcing payroll means you can reduce costs, and will no longer have to deal with training and the hassles of developing your own in-house team. Instead, your provider will simply help you scale their software to fit your growing needs… 

3. Minimise risk 

Payroll errors can lead to over or underpaying taxes, both of which come with financial consequences – although underpaying also invites HMRC’s harsh wrath. Underpaying taxes due to a payroll error could mean that you’ll need to pay back the tax in one big sum, hurting your business’s cash flow. You’ll also need to pay interest for the money owed, straining your purse strings just that bit more.

Staying compliant with ever-changing laws and regulations can be tough, but when you outsource you take away this stress. You don’t need to worry about staying up to date as your provider will do all the difficult parts for you. Providers tend to send simple updates on any changing laws or regulations, and their software will also adapt to account for any changes.

4. Strengthen security 

Running payroll in-house can come with risks such as identity theft, as the process is managed by a third-party provider who offers a secure platform. Even if your software is secure, there are other factors to consider, like the safety of the server. When outsourcing payroll, you have the freedom to choose a provider that offers secure cloud-based servers with the latest encryption tech to ensure your data stays safe.

Payroll providers use electronic payment methods, so if something does go wrong, it can always be traced and fixed. Secure cloud-based servers mean that payroll is centralised, ensuring you and your employees can access relevant data at all times seamlessly, making it easy to check payslips, book time off, or amend personal details. 

5. Integrate HR solutions 

Many payroll providers also offer an integrated solution to include HR capabilities. This means you can easily tackle both payroll and HR at once, and have the data feed into each other. This makes it easier for you to handle these aspects of your business. 

Having integrated payroll and HR makes carrying out HR tasks so much easier. Providers offer automation, forms, and tools to provide you with a simpler and more seamless experience. 

Next steps

Outsourcing payroll offers so many benefits, giving you more time and flexibility, reducing your costs, increasing security, and minimising risk. If you still want to keep a close eye on your payroll, that's fine – you don’t need to give up complete control. Different providers offer varying levels of outsourcing, this way you can outsource as much or as little as you want. 

Now you know all about the importance of outsourcing payroll, you might be wondering how to get your hands on the best payroll software. Well, we’ve got you covered. All you have to do is give us a few brief details about your business. We’ll do all the hard stuff, and match you up with trusted payroll providers who’ll then contact you with no-obligation quotes for you to compare. 

Written by:
Zara Chechi
Zara is a Payments Expert, specialising in writing about Point of Sale systems. With a Law Degree from City University of London, she has used her legally-honed research and analytical skills to develop expertise in the Business Services world. Featured in FinTech Magazine, she quickly became an expert in payroll, POS systems, and merchant accounts.
Reviewed by:
Heleana Neil, Business Services editor
Heleana Neil specialises in Business Services, managing the strategy and production of content for SMBs, helping businesses with the challenges and opportunities they face today. Covering everything from payroll to payment processing, Heleana uses her expertise to help business owners make better, informed decisions and grow their companies.