Question: Is Outsourcing Payroll A Good Idea?

Why do companies outsource their payroll?

Outsourcing payroll allows employers to concentrate on their core business and frees up the business owner, human resources or accounting personnel to work more on strategic tasks that could ultimately affect your bottom line.

Outsourcing payroll immediately frees up precious time..

What is the cost of outsourcing payroll?

One of the questions we get most often from companies is: How much does it cost to outsource payroll? The short answer? It’s surprisingly affordable. While pricing depends on a number of factors, you can generally expect to pay about $150-$200 per employee per year.

Is payroll a finance or HR function?

Sometimes payroll is part of HR, sometimes it’s part of finance — and occasionally it’s a stand-alone department reporting directly to the CEO.

What are the disadvantages of outsourcing?

Disadvantages of OutsourcingYou Lose Some Control. … There are Hidden Costs. … There are Security Risks. … You Reduce Quality Control. … You Share Financial Burdens. … You Risk Public Backlash. … You Shift Time Frames. … You Can Lose Your Focus.More items…•

Why do companies hire third party payroll?

By choosing third party payroll services, you literally wash your hands of, among others, paying salaries, managing compliances, remitting payroll taxes, maintaining payroll software, and generating reports for in-house use. Everything is taken care of; freeing time and resources for you to accelerate business growth.

How does outsourcing payroll work?

Simply put, payroll outsourcing means exporting some or all of your payroll administration to a specialist third-party organization. The payroll package you choose will integrate with your existing business infrastructure, including your HR department, and deliver its services each pay cycle.

What percentage of companies outsource payroll?

Forty-seven percent of U.S. companies and 47% of Canadian companies reported outsourcing payroll. The largest companies are more likely to outsource payroll, as 73% of U.S. companies in the survey with revenues of $5 billion or more outsourced this function.

How much does Paychex charge for payroll?

Express Payroll costs $60 per month and $4.00 per user. Paychex Flex Select costs $90 per month and $5.00 per user. Paychex Flex Pro costs $150 per month and $3.65 per user.

What does it mean to outsource payroll?

Payroll outsourcing is simply the use of a service provider to handle the administrative and compliance functions of paying employees. It is important to note that payroll services are only that, and do not offer a local employer of record for the foreign company.

How much does it cost to hire a payroll company?

Standard costs and fees Certain costs are associated with just about any payroll solution. There’s usually a base fee that can range from $10 to $85 per month. Then, you might have to pay an additional fee for each worker on the account – anywhere from $5 to $15 per person per month.

What are the pros and cons of outsourcing a company’s payroll function?

Before handing over the responsibility for the paychecks to an outside service, weigh the pros and cons.Pro: It’s a Time Saver. … Pro: It Calculates Taxes Accurately. … Con: The Wrong Company Can Produce Errors. … Con: Business Owners Ultimately are Responsible. … Con: Paying for Services Businesses Don’t Need.

What is the benefits of payroll outsourcing services?

Free up your time: Payroll processing is indeed a brain storming process. Outsourcing payroll can free up staff to pursue other important value added and revenue generating activities. Trim costs: The direct costs of payroll processing can be greatly deduced by working with an efficient payroll provider.