Payroll outsourced service is to manage the employee's salary, social benefits, taxes in a foreign or domestic location all of this can be done at ease with the help of a payroll outsourcing service.
Payroll outsourcing in simple term means the assignment of your company payroll management to a third party. Through this, one can aim to get timely and accurately closure and reporting of monthly payroll.
Payroll outsource service is a complex yet crucial part of management team in today’s time. Payroll management can be done at ease if it is outsourced to a credible company as it saves time, efforts and and employee productivity.
Other benefits of payroll outsource service are:
- Simplicity ?? Ease of access of information
- Data Confidentiality & Security
- Better management and control
So how does payroll outsourcing service benefits HR?
Scope of work of an HR and payroll management system’s effect on it
The scope of work for HR is such that they directly don't have to deal with the payroll management system. However, their main role is to make sure that all employees get paid on time since they will be the one's getting complaints.
The benefits an HR get with the help of outsourcing payroll service are:
- Cut down of menial tasks
- Smooth outboard process
- Timely payments (payroll processing)
- Accurate payments ( compliance with tax law is easier with payroll outsourcing service).
Key Features of payroll outsource service
Your payroll service should include all of these services to improve your company's processing and management system.
The most salient function for any payroll service provider is the ability to process the various facets of payroll, which also include timekeeping and overtime payments and it's rate.
Tax filing help
Most of the payroll service providers have automated calculations for tax and help in pre-filing employee's taxes.
The payroll service provider can help you with certain complicated accounting functions. Streamlining the entire finance process.
Over and above these, it also helps in services such as :
- Direct deposit
- Compliance help
- Streamline outboard
- Correct payment.
- Avoiding IRS
- Cost control
In 2019 Australian payroll association found out that over 32% of their respondents outsourced their payroll, which was at 24% in 2018.
Keeping a record of every local, state and federal tax law governing how you withhold money from employees' paychecks is an old-school method. You need to stay relevant with these laws, but ever-changing rules and laws make it seem impossible to stay updated with them.
A payroll service provider monitors these laws and other regs so that you are off the burden of staying up with compliance and ensuring all your deductions are accurate.
This also takes off the burden from your in-house finance department, which does not have to monitor compliance requirements as closely, although it is still necessary for them to review updates regularly to make sure there is no fraud happening.
Challenges that HR has to go through because of payroll outsourcing service
Transitioning to any new system can always be a little rough. Despite all the benefits payroll service providers give, there are a new set of challenges that comes along with it. Some of them are
Once decided on to shift to an outsource payroll system. You also need to decide whether or not you want to shift your accounts fully or partly to outsourced payroll management.
For this purpose, HR, IT and finance need to work together to come to a conclusion that is best suited for your company.
In addition to this, dealing with a third-party vendor is often a task. The solution to all these challenges is clear communication and being clear about what you are looking for and what solutions you would like.
It's important to review the agreements in-depth before hiring an outsource payroll service about their scope of work.
A challenge HR has to face more than often. Change management is complex. Letting everyone get accustomed to this significant change can be a big challenge, especially for the old employees.
Be sure that you lay off some benefit that comes with adding a new solution. For this purpose, it is important to explain to them how much easier payroll tasks will be from now.
Over and above these challenges, the other challenge that HR has to face is employee training.
Despite these challenges hiring an outsource payroll service makes up with the time and efforts to save you and is worth all the effort.
Benefits of hiring outsource payroll service on employees
The key benefits of hiring outsource payroll services on employees are:
- They save on employees time
- Payroll service provides leveraging technology.
Putting time back into your business
Performing payroll in-house is an administrative task that scales as your business grows and is not directly tied to profits. Payroll processing, ensuring compliance, timesheets and pay conditions, handling employee queries, and preparing reports, are all services provided by payroll providers.
Payroll outsourcing frees up administrative time for your employees.
Having an outsourced payroll service gives you experts who can handle employee queries, ensuring that the staff are focused on business operation and not payroll.
Realising the cost-benefit
Processing payroll in-house has a direct business cost.
For example, a payroll benchmarking report 2019 stated that a business with between 50-199 staff has an average cost of $69.57. For a business with 100 employees, this would equate to directly paying monthly $83,484.
The modern-day business operates with a workforce mix of full-time, part-time, contractor and casual employees requiring payroll services to maintain minimum pay rates and pay conditions.
By outsourcing your payroll, you not only gain access to experts who can provide advice and ensure compliance against changing legislation but provide access to payroll software with perks such as modern awards, time and attendance, employee self-service.
Pure cloud-based software has kick-started a global revolution in employment. Remote working and flexibility are a growing need of the hour.
Small and medium businesses are a major benefactor of this change cycle.
Outsourcing payroll function compounds this advantage. Since payroll software is commonly coupled with HR software, employee onboarding can now be managed digitally.
Improve efficiency for HR management
In addition to managing compliance, other responsibilities for HR are related to personal point dependency, security and fraud.
HR and payroll are generally the head of the company. For small and medium businesses are almost dependent on single resources. Outsourcing payroll service eliminates this risk and allows senior staff to focus on activities that add more value to their business.
Payroll fraud can cost a lot of money to businesses and can rise in other fields as well. By outsourcing to a company with expertise in payroll service, a business can move forward with confidence and avoid fraud and costly errors.
Payroll management points to be considered
- Choosing the right payroll outsourcing company
- Loss of internal control
How Paysquare service can help
Paysquare service is a leading service for HR and payroll outsourcing management.
Paysquare serves over 1000+ client's in India and several others in international locations. Catering to more than 15+ countries. Their accuracy rate has been 99%+
Their clientele includes companies such
- Advance pharma
- Zensar technology
And many others.
They are recommended for
- Accurate payroll delivery on time and consistently
- Providing a self-service portal for employees and HR admins.
So is it time that you opt for outsource payroll?
While it may be common for businesses to have an in-house payroll service, many prefer to outsource this service and hire a specialised payroll service that has add-on perks.