Four Benefits of Outsourcing Payroll

Payroll is an important part of any business. Aside from being a bookkeeping task, it is how employers reward and retain their workers. Payroll errors can lead to dissatisfaction and discouragement among employees. But, for a business, even a simple payroll mistake can be costly. While some small businesses prefer to handle payroll internally, many businesses can benefit from outsourcing this complicated task.

Payroll outsourcing offers the following benefits:

Time Savings

In-house payroll processing takes a significant amount of time to complete. The demand for the payroll time increases as the company grows. Every pay period becomes a series of balances and cheeks to avoid errors while handling employee data. Outsourcing payroll offers the HR department more time to concentrate on what matters most to them.

Money Savings

When a business saves time it also saves money. An in-house payroll department will have to handle tasks such as calculating payroll every pay period. The more employees the company has the more payroll they will have to process. After calculating, they will print, sign, and distribute paycheques, as well as prepare reports that must be submitted to the accountant and kept in-house. Finally, the payroll department will need to prepare and remit payroll taxes and returns to government agencies. Analysing the time and cost involved in doing all these processes will lead to a realisation that hiring a full payroll service provider is more cost-effective.

Improved Security

Processing payroll is complicated and possibly risky. Even if the company has trusted employees to handle the task, there is always a risk of identity theft, tampering with company records, and embezzlement. Also, the company may end up using unreliable payroll software that can only waste resources and even damage the company’s reputation. But outsourcing payroll to an experienced and trusted provider can ensure the confidentiality of payroll data. Payroll providers invest in state-of-the-art systems to store and protect data.


In general, small businesses owners are not experts in the world of government tax regulations. But, they have the legal responsibility to comply with these regulations by accurately reporting employment taxes to government agencies. Failure to do so can result in audits and penalties that no small businesses will ever want or need.

Because of the constantly changing government rules and regulations, small businesses might not be able to stay on top of these changes. Thankfully, professional payroll providers stay current with rules, regulations, and changes in tax rates. Indeed, they may even have a reliable team of experts dedicated to helping clients stay abreast of regulatory updates.

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