Quick Payroll Outsourcing Tips to optimize your Startup business


As startups grow, the entrepreneurs are left with less and less time to look after payroll services such as salary calculation and tax filing. With this, there is an additional burden of accurately completing every task to avoid fines and maintain compliance.

However, now, a simple concept of payroll outsourcing is surfacing as a life-saver for many startups. Many entrepreneurs prefer outsourcing payroll services to avoid making mistakes and reduce the hassle of extreme calculations. But, in the process, they miss a few things.

Let’s see how you can use payroll outsourcing to optimize your startup.

Payroll Outsourcing

Quick Tips for Payroll Outsourcing

1. Manage Spending

When you outsource payroll, you need to discuss your spending with your payroll partner clearly. As well as, you will have to analyze the spending personally from time to time to ensure where the money is going.

2. Discuss Compliance

Many consider compliance and taxation as the most crucial part of payroll management. If your payroll outsourcing partner doesn’t have enough knowledge about law compliance and taxation, then there is no point in spending money on outsourcing. To make sure that your compliance and taxation will be handled carefully, meet the team that is going to manage your payroll.

3. Utilize Cloud Portal

It will not be possible to communicate and deliver every information via email or on call. And since you and your outsourcing partner is placed at different locations, a cloud portal will help a lot. It will keep everything crystal clear, you’ll be able to access reports as and when required, and it will be easier to provide monthly data to your outsourcing partner.

4. Handle Security

Apart from all the other things, you need to keep your employees’ and company’s data safe. It would be hazardous if anybody broke into the systems and gained information. So, you should examine your payroll partner’s security structure before anything else.

Note: These are the most important things that you should definitely inquire about thoroughly, but there are other things as well. These include talking about compensation, the time required for certain tasks, meeting your dedicated professional, carefully reviewing your payroll outsourcing agreement, etc.

What Payroll Services You Should Outsource?

Here’s a quick list of services you can outsource from your day to day business operations:-

  • Tax return calculations
  • Monthly, quarterly, and yearly report generation
  • Maintaining attendance and time
  • Maintaining compliance with different payroll laws
  • Looking after employee insurance

Information Transfer in Payroll Outsourcing and How it is Used

Information transfer to your payroll partner happens in three steps:

1. Initial Information

In the first step, you provide previous information related to payroll via a secure method. Here, it is essential to confirm that no information gets compromised during transfer, by the payroll partner, or by any other third-party. This information includes employee data, salary details, tax details, deductions, benefits, etc.

2. Electronic Transfer

Once your payroll partner successfully receives the previous information, they analyze it and use it to clear previous work. Then, a system is set up generally by the payroll partner to maintain a continuous flow of information electronically. With this, you won’t have to send data separately, the data will be directly recorded in the system. This data includes the start time and leaving time for employees, leaves, etc.

3. Track and Analyze Data

When a system is in place and you are satisfied with the services, your job is to monitor the process regularly. Ultimately, it is your company’s data and you need to keep a check on if it is being processed carefully and correctly.


Payroll outsourcing is an amazing option for startups as they are in growing phase. They need a proper payroll management system, but still can’t spend enough to hire dedicated employees. Hence, outsourcing payroll helps startups avail both cost-effective services and experienced professionals handling their payroll process.