That automation cuts down on manual entry and helps avoid errors between HR systems and benefits providers. Providers can take on tasks like new hire reporting, monitoring Affordable Care Act (ACA) requirements, and making sure payroll tax deposits go in on time. That extra layer helps businesses steer clear of costly IRS penalties and late filings. These taxes must be set up correctly before employees are paid.
What Is Payroll Outsourcing & How Does Payroll Outsourcing Work?
That extra weight makes errors more likely, and even small slip-ups can lead to penalties or compliance trouble. If your company offers multiple healthcare plans, each with different contribution amounts, managing these figures can become quite complicated. With this kind of oversight, employers gain peace of mind and cut down the risk of errors that often creep in when compliance is handled internally.
This guide answers those questions and more, providing you with a clear understanding of what is and isn’t covered in payroll outsourcing, as well as today’s best payroll vendors. But what exactly does payroll outsourcing mean for your team? What are the best payroll outsourcing solutions in 2025? What are your payroll outsourcing options? What are the challenges and risks of outsourcing payroll? How does outsourcing payroll work?
Downsides of outsourcing payroll
One option for recording time is the company’s online worksheet for work hours and all other compensation, but you can also import the time data using an Excel spreadsheet. Acadia HR has 30 years of experience offering HR outsourcing to businesses and nonprofits of all types and sizes. Many businesses think of HR outsourcing as an all-or-nothing option that replaces their existing HR operation completely. All three services require a 12-month contract, but Vero HR’s consultancy service meets a business’s short-term HR needs for one-off projects or other situations.
How Paycom and Beti® Cut Labor for Payroll Processing by 90%
Companies experienced in arranging outsourcing contracts with third-party entities can rely on past experience for guidance. In other words, whether the company wishes to fully outsource or co-source, and if the latter, how does it wish to divide responsibilities? Allowing a third party to direct company funds and manage highly sensitive information may once have been unthinkable.
Employee self-service
That said, there’s a huge range in what payroll outsourcing providers charge, and some flexibility in how much of the payroll process they’ll take on, so cost-benefit analyses will vary depending on company goals and budgets. The only types of businesses that identify payroll management as a core function are, well, the payroll outsourcing providers themselves. However, when calculating the total cost of HR outsourcing services, companies must also consider how much they will save by needing fewer in-house HR employees on staff. A global payroll provider with local expertise ensures employees are paid accurately and on time, while keeping your business compliant wherever you operate. Payroll outsourcing is the process of hiring an external provider to manage payroll administration, including salary calculations, tax withholdings, compliance, and employee payments.
Comprehensive support helps prevent payroll errors and resolves issues swiftly when they arise. Strong security measures and up-to-date compliance credentials are essential for minimizing risks and avoiding penalties. Our expert guide reviews the top 9 solutions to help you streamline your payroll and stay compliant. Learn how Playroll helped companies grow their teams. Instantly aggregate and compare the cost of employment by country. Your hub for global HR insights, resources, and more.
- The external payroll company will manage all the necessary record keeping and submit the necessary reports to the appropriate parties or organizations on your behalf.
- Typically, providers report to the client on a regular, predetermined basis, confirming services rendered and detailing performance.
- Misclassification or filing mistakes can result in costly fines.
- Since you’re trusting another company with personal and financial data, you need to be sure that it is compliant and able to protect against data theft.
- Payroll providers are less likely to make these errors because they have robust checks and balances and update their systems regularly to comply with changing regulations.
- This means employees don’t have to hop between disjointed systems to access the data they need.
Clean up your payroll data
You have the option of adding payroll, recruitment and technology support to Vero HR’s Partner, Team and Enterprise outsourcing packages for small, midsize and large companies, respectively. U.K.-based Vero HR is a great outsourcing choice for U.S.-based businesses supporting an international workforce. The HR specialties represented on each team include business performance, client implementation, employee performance, safety net realizable value of accounts receivable and HR service provision. Businesses that outsource their HR operations rely on the service’s reports for their workforce planning and day-to-day employee management. Whether you’re looking to outsource just a few HR operations or all your workforce management processes, one of our top picks will likely be the right choice for your business’s needs. One of the biggest advantages of payroll outsourcing is support for international workforces.
Best Outsourced Payroll Services Companies in 2025
If you don’t have the funds for new infrastructure and full-time payroll staff, outsourcing can help you avoid a big financial outlay. No, outsourcing is usually the more affordable option — especially for small businesses. Before handing over your payroll data, take the time to review it for accuracy and clarity, and clear up any discrepancies or outdated information. If you decide to start outsourcing, you need to plan carefully and take your employees’ concerns into account. However, if you’re planning to leverage the many benefits of hiring the provision for doubtful debts in different countries, you may want to opt for a payroll provider that can easily accommodate that.
Book a chat with our team to learn more about consolidating your payroll operations, no matter where your team is located. As a first step, it’s critical to take your business’s size and needs into consideration. Its intuitive platform ensures easy management. Known for its transparent pricing and ease of use, it also offers benefits administration.
Syncing Payroll and Benefits Administration
To make the process easier for you, this article will explore the best companies providing outsourced payroll services in 2025. Businesses are increasingly choosing to outsource payroll services to maximize the efficiency of this function and ensure compliance with relevant laws and tax obligations. Our experts at Paychex can help you determine whether outsourcing payroll is the right choice for your business and which services to outsource for optimal operational savings. When a business hires someone else to handle payroll, it may incur various fees, depending on the payroll outsourcing services agreement. Most benefits programs also require payment amounts to be sent to different companies, which the payroll outsourcing company can handle.
- Navigating global rules and staying error-free is tricky, and budgeting for it all can be a real headache.
- Payroll and benefits are closely connected, as contributions to health insurance, retirement plans, or other perks must be factored into gross-to-net calculations.
- Deel is an all-in-one payroll and HR platform for global teams.
- All three offerings include a dedicated HR support person, although Partner’s point person works with your existing HR manager, while Team provides a full-time HR administrator and Enterprise gives you access to a dedicated senior-level HR professional.
- In addition to payroll, you can benefit from outsourcing various other financial services.
By outsourcing your payroll, you can streamline your operations, reduce administrative burden, and gain access to expertise. But outsourcing isn’t necessarily the right approach for every business. It’s no surprise, then, that many organizations are outsourcing their payroll — or at least considering it.
According to Allied Market Research, the global payroll outsourcing market was valued at $9.9 billion in 2021 and is projected to reach $19.5 billion by 2031, growing at a CAGR of 7.2% from 2022 to 2031. Businesses outsource payroll to reduce errors, improve compliance, save time, and focus on core operations. While outsourcing payroll comes with many benefits, it’s not without its challenges. When you’re dealing with payroll across different countries, rules can vary massively, including regulations tied to wages, overtime, taxes, social security, and data protection. Payroll can be a complex, time-consuming process — especially if you have employees in multiple locations.
By outsourcing your payroll, you can minimize the number of mistakes — and the headaches that come with them. With a one-stop solution like Remote, you don’t need to partner with multiple providers, either. Payroll is an administration-heavy, time-intensive process. Outsourcing your payroll can be the key to reliable payments and compliance.
Payroll and benefits are closely connected, as contributions to health insurance, retirement plans, or other perks must be factored into gross-to-net calculations. Book a demo to see the platform in action and speak with a specialist about your outsourcing options. And as your team grows, so do your payroll needs. You have to navigate different currencies, exchange rates, bank laws, and compliance requirements. Small teams need simplicity and affordability without sacrificing compliance.
Outsourcing payroll eliminates these burdens, allowing HR teams to focus on strategic initiatives like employee engagement and talent development. The voluntary security and compliance standard SOC 2 is also recommended because it has clear guidelines on how to deal with sensitive data. Choose an efficient payroll management solution like Remote and avoid any major issues. This option is also good for maintaining compliance, reducing human error, and improving the onboarding process.
When analyzing cost, it’s important to remember that outsourced payroll has a knock-on effect. Some payroll providers also include hidden fees but, in most cases, you can budget more effectively. The costs of outsourced payroll are a little easier to predict. With an in-house payroll department, you have to pay your internal team’s salaries, benefits, and payroll taxes. Let’s break down the costs and benefits of each, so you can determine what’s best for your company. As mentioned, the potential cost savings of outsourcing can be significant — depending on the size of your business and your circumstances.
This allows you to focus on core activities without the administrative burden of payroll compliance and management. We’ll also offer additional insights into outsourcing payroll tasks. However, identifying what is a journal entry in accounting outsourcing companies that can meet your payroll needs can be challenging. Comprehensive coverage for your business, property, and employees. Help employees save for retirement and reduce taxable income.
