All employers have to decide on how to manage and maintain their payroll. For larger companies, with over 20 or so employees, it's likely that a dedicated accounts department can manage the task, but for smaller business owners, while superficially it may seem financially prudent to keep payroll in-house, there are some compelling reasons why you should consider outsourcing.

  1. Experience

    Professional payroll companies have years of experience dedicated to running, maintaining and managing payrolls. This experience translates into the most efficient payroll system for your business, and ensures your employees get paid the correct amount, on time every time. If your staff don't have to worry about whether or not they're going to be paid the right amount on the right day, they'll be more productive.

  2. Cost savings

    It may sound counterintuitive, but the cost of outsourcing your payroll can save you money. When most small businesses factor in expenditure on computers, payroll software, training, the time taken to run the payroll (and the headache and additional time taken correcting payroll errors), outsourcing starts to make financial sense. It's certainly worth undertaking a comprehensive cost analysis to get a firm grip on the potential cost of running your payroll in-house, and compare that with the cost of using a payroll service.

  3. Legislation

    PAYE regulations are constantly changing. Real Time Information (RTI) reporting which was introduced in April 2013 and it radically overhauls the way in which employers need to report payroll. A dedicated payroll provider will keep up to date with any new payroll legislation and ensure that your payroll is compliant. Payroll is the employer's responsibility and outsourcing it may prevent costly mistakes and payment delays.

  4. Software

    Payroll providers can guarantee that they're using the latest version of the relevant payroll software and the most up-to-date tax tables. Most employers forget that updating software is a time-consuming task. Without regular updates there is the danger of running an incorrect payroll this can potentially lead to an employer incurring expensive penalties or making incorrect payments.

  5. Improve efficiency

    Outsourcing your payroll frees up your time and that of your employees to concentrate on growing the business. Running payrolls is time-consuming, particularly when you take into account training and keeping up to date with new legislation and software. A payroll company should be flexible enough to seamlessly fit in with your business and provide an essential service without taking up your valuable time.

  6. Security

    With internet fraud a constant cause of concern for all businesses today, it's essential that your employees' bank details are kept as secure as possible. Using a professional payroll service will ensure that your staff's bank and payment details are safe from potential fraud.

  7. Peace of mind

    Many small business owners find running an in-house payroll system stressful; ensuring that deductions are correct and that payment is made on time is a big responsibility. Using a payroll company will give you the peace of mind knowing that your employees are getting paid accurately and on time.


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The information contained in this article is intended to provide only a general outline of the subjects covered. It should neither be regarded as comprehensive nor sufficient for making decisions, nor should it be used in place of professional advice. The author and the publisher disclaim all responsibility for any loss arising from any action taken or not taken by anyone using the information in this document