And, with robust and customizable integration options, it’s well-suited to fitting alongside existing workflows and tech stacks. There are plenty of features, functionalities and benefits that a given business might need from their payroll support vendor. We’ve focused on just a few, to highlight some of the most common (and most commonly needed) answers to HR and payroll pain points. Before optimizing your payroll systems, be prepared for potential challenges.
Paychex PEO: Best HR + payroll service
Paychex provides solutions for self-employed business owners to pay themselves a salary while also saving for retirement. Expect there to be a learning curve, both for you and your employees. However, the service you provide should help you with that process to ensure a smooth transition. Here are some of the important considerations as you look into payroll outsourcing solutions.
- As discussed, non-compliance — whether accidental or otherwise — can land your business in hot water.
- Keeping up with all the requirements is takes its own type of expertise.
- If you’re thinking of outsourcing, finding, vetting, and working with multiple third parties is one option.
Outsourcing, on the other hand, means handing over your entire payroll process to another company. They take care of everything from calculations to tax filings, offering expertise and compliance guarantees. Like with any business decision, you’ll want to know how your business will benefit if you decide to outsource your payroll.
There’s no guarantee outsourcing will be cost-effective, but many companies choosing to outsource find it cheaper overall than keeping payroll management fully in-house. Hiring out the work can, when all goes well, provide significant advantages and cost savings. The only types of businesses that identify payroll management as a core function are, well, the payroll outsourcing providers themselves.
Top payroll outsourcing companies comparison
Creating your W-2s and 1099s is also a service that most payroll providers handle, typically for an additional fee. The cost of payroll administration varies, depending on the direction you go. On the higher end of the spectrum you can actually hire someone to join your team and handle payroll-related functions. This approach gives you complete control over the payroll function, but it comes with a hefty price tag (tens of thousands of dollars) and a lot of compliance-related responsibility and risk. If you’re reading this article, you might be in the process of learning that running payroll can eat up a lot more time than you may have expected.
What are some benefits of outsourcing payroll?
Outsourcing payroll stands to greatly reduce a major administrative distraction for most companies, allowing them to “cut the fat” from their employee rosters and keep their organizations focused on other tasks. Payroll outsourcing also enables globally dispersed organizations to save money if they use one global payroll provider. Hiring and paying employees in multiple countries requires more payroll administrators and legal advisors.
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. Handing your payroll over to third-party providers means trusting them with sensitive data, including your employees’ details, tax information, and even their attendance records. Wherever money is being handled and transferred between two parties, there’s always the risk of fraud. And it’s not just theft — you also need to consider your employees’ sensitive data and ensure you’re complying with local data privacy laws.
Rippling: Best overall outsourced payroll service
No matter how many employees you’re calculating payroll for, it’s easy to make mistakes or run into delays. And when you add new jurisdictions, you multiply the level of complexity of what is a preferred return how do they work in real estate each payroll run. Payroll software is a tool that helps you manage payroll yourself.