What is payroll outsourcing? definition, considerations, and best practices

Once payroll is submitted, you receive an email confirmation to confirm a completed payroll run. To conduct my test-drive of OnPay’s platform, I used the Google Chrome browser on a Windows laptop and an Android mobile device. To learn more, speak with one of our friendly experts — and see how ‌Remote can help your business. Before you do anything, communicate your intention to change with your team. Let them know what’s changing, why you’re doing it, and — most importantly — how it will affect them.

You can hire a firm to handle payroll completely for your business. Similar to a PEO (but without the co-employer relationship) it may also offer benefits administration and HR services. An ideal tool for remote employees who have travel, Wi-Fi bills or office supply expenses, Paycor’s mobile app offers expense tracking and reimbursement tools.

Outsourced Payroll Functions

Paycor offers plans for businesses of all sizes, but the software is best for medium and large businesses with more complex HR needs than smaller companies. Wave Payroll offers employees a self-service portal that allows them to access their pay stubs and W-2 forms without HR involvement. They can also use the platform to update their contact and banking information. TriNet helps small businesses save money by looking for tax credits for each company. For example, it allows you to input tax credit information into the payroll system and then prepares forms 8974 and 941 for you to claim those credits. From there, I could either send the employee an invite to input their own information (which I could then review for accuracy and approve) or manually enter the data myself.

Once you choose a payroll cycle, run a sample check with a pay stub to ensure the system works properly. Business owners who place a high value on their time and peace of mind often end up outsourcing payroll. By partnering with a full-service provider, most of their payroll responsibilities – wage calculations, tax withholdings and deposits, reporting, etc. – are taken care of for them.

Outsourcing payroll: A pros and cons guide

Both the main dashboard and the HR dashboard were easy to customize. OnPay users give the product kudos on popular review sites for ease of use and responsive customer service. The what are audit assertions and why they are important company’s automations ripple across the system so all parts of the software, from its IT and Financial Cloud to its HR and payroll features, are always in sync. You can take the pressure off your existing team by outsourcing certain tasks.

1. Not all tools can do international payments or contract payments.
2. And, with the ability to pause the subscription, it is great for service companies such as landscapers who hire contractors often and endure off-seasons.
3. In addition, when trying to access tax services, I was simply upsold by a partner company that wanted $500 plus $150 to do my taxes.
4. For example, when running biweekly payroll, not all employees were selected, so you have to be sure to check that all the right people are included for each payroll run.
5. As with any business decision, it’s up to you to decide whether or not the pros outweigh the cons when looking to improve your current payroll processes.

If a company is outsourcing internationally, it shouldn’t assume that it can ignore employment regulations in the provider’s country, as these can be very different from those in the United States. When choosing a payroll outsourcing provider, it’s important to remember what’s at stake. A good provider will make things easy for the client, but client companies shouldn’t be lured into a false sense of security.

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Some outsourced payroll companies also offer human resources, which can streamline business operations. Those are both good ideas, but outsourcing will come down to your business needs. Payroll outsourcing certainly has advantages, but no single resource can point a company toward guaranteed success with payroll management. Company leaders should not take a decision about outsourcing payroll lightly but should understand its convenience and financial savings. A solid understanding of payroll outsourcing’s pros and cons, along with accurate information on existing payroll management costs, can offer helpful guidance. As mentioned before, these are further areas where a misstep by a payroll outsourcing provider can become a problem for both the provider and the client company.

Two outsourcing options: Get what works for you

If you do not want to outsource payroll, consider using software to process your employees’ payments and taxes. Once information has been exchanged and procedures established, the payroll outsourcing provider begins its actual duties. This almost always involves distributing pay on a clearly defined schedule (every two weeks is popular).