Outsourcing payroll services

Published March 16, 2020

Every business is different. But payroll is something that every business must manage and payroll outsourcing can prove to be highly beneficial. Just as businesses outsource accounting services, why not offload internal payroll to a payroll outsourcing service so the business can focus on its core priorities?


Here are 10 reasons why you should outsource your payroll services:


Save time

By outsourcing your payroll services, time spent on compliance, regulation, human resources and tedious re-checking of data every pay period is eliminated. Outsourcing frees up time for further tasks that will help to increase the productivity and efficiency of your business.


Save money

The cost of hiring and retaining specialised staff is expensive and increasingly seen as unnecessary. It allows you to save training an employee or hiring a payroll manager which is very costly. If your business is reasonably small in size, there’s a considerable chance that the cost of employing a team would be significantly greater than the cost of using an outsourced payroll service. Furthermore, outsourcing payroll services eliminates costly IT infrastructure by replacing it with secure cloud-based solutions.


Focus on your core business

Outsourcing payroll services allows business owners and entrepreneurs to focus on the business functions that generate revenue and invest in strategic resources that increase value and drive growth.


Ensure compliance and avoid penalties

When you outsource your payroll services, the providers of the service have the expertise and responsibility to ensure your business complies with the minimum standards. 

The experts are always up-to-date with the latest information such as changes to payroll tax. Choosing a payroll service company can save you money on legal fees, and put compliance in the hands of a business that understands these legal issues.


Increased security

A benefit of outsourcing is that the protection of your data will be met the payroll provider. This will eliminate the risk and hassle of protecting it in-office where risks include identity theft, misuse of profits and interference with your business records.


Real-time reporting

All potential accounting and payroll related statistics can be obtained on a regular basis from professional service providers handling outsourced services. Advanced payroll software can help businesses look at tailored reports that can save a lot of time while making important business decisions.


Access to expert advice

Payroll processing companies hire professional and experienced payroll experts to do your payroll. You can get consultancy and tips regarding payroll services from them. 


Access to state-of-the-art technology

Payroll software is not cheap and if you choose to do your payroll in-house, you will need to purchase and update the latest software. Those who choose to implement payroll outsourcing will have access to the service provider’s software and systems at a reduced fee.



Outsourced payroll works well with automation, reducing room for human error. Fewer mistakes lead to a lower risk of non-compliance.


Benefits for employees

Employees can update their basic information on their own. Most payroll outsourcing services offer web portals where your staff can handle simple payroll requests like reprinting payslips, changing their address or updating their tax status.


In addition to reasonable pricing, excellent service levels and a great reputation, here are some other tips on what to look for in a payroll service provider: 


Security and reliability

Because you are sharing personal information with them, make sure you have a provider with good controls in place. Make sure you have clarity about what your service provider is doing and regularly ask for reports and feedback. 


Track record

Look for a service provider with a strong track record of serving businesses similar to yours. Furthermore, make sure you know exactly what you are paying for and find out which services are not included in the standard fee.


Compliance capabilities

Make sure the service provider is up to date with the latest compliance legislation to ensure your business is in the clear. 



With the fourth industrial revolution in mind, you will want a service provider who keeps up with the latest developments in the industry. Cloud-based payroll services and mobile access have become the order of the day.



Make sure payroll and payment systems can easily integrate with other platforms, such as accounting software to make access for accountants easier.

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