5 Crucial Reasons to Outsource Payroll

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Business consultants have long advocated outsourcing non-core functions.

A non-core function is one that is not a profit center. A non-core function may be essential, but doesn’t differentiate your business strategically from competitors.

In most businesses, administrative and back-office activities such as payroll are non-core functions.

But the question business owners and managers want answered is:  what do you actually gain from outsourcing non-core function like payroll? Is it worth all the time and effort just to investigate and identify appropriate outsourced service providers? Then there’s the work involved to transition the function outside to the third party service.  Do the benefits of outsourcing outweigh that effort?

So let’s find out what are those crucial reasons to outsource payroll.

1. Complex Payroll Rules and Calculations:

With so many statutory payroll rules, employee benefit programs, employees joining & leaving and taxes to consider, it is becoming extremely challenging to process the exact salary and reimbursements of each employee. Even if you can do all this by yourself, how can you be sure that everything has been taken care of? How will you verify the accuracy of your calculations? Do you have a safe and secure mechanism to do payroll processing? Professional payroll providers with the help of technology, perform tedious calculations and bring out desired output with zero error & 100% compliance.

2. Payroll Reports:

Payroll processing systems provide a wide array of reports like monthly pay register, Salary disbursement letter as per upload format of banks, monthly tax report, salary progression chart etc., that address the most common reporting requirements to complex. You can quickly get the outsourcing company to deliver specific & ad-hoc reports for your custom analysis. Having working for multiple clients, the outsourcing company are aware of the correct MIS data helps in analyzing of salary cost across various functions.

3. Compliance with Government Regulations:

Organizations in this complicated world of government tax regulations are legally responsible for any cases of misrepresentation or a failure to accurately report employment taxes to government agencies. Government rules and regulations are always changing and business owners can’t be expected to stay on top of these changes. Professional payroll providers, on the other hand, are updated with current & expected new amendment with rules, regulations and changes in tax rates. This helps in PAYROLL PLANING.

4. Employee Identity & Salary Data Security:

Payroll processing is a complex and confidential business operation. There is always a risk of identity theft, embezzlement of funds, or tampering with company records for personal gain. To counter these issues highest level of security of ISO 27001 needs to be in place at your data center, SAS70 audits, encryption of data, Advance level Firewall. Have proved to secure important data’s. With recognized professional payroll providers the data is always safe and secure.

5. Cost Effective and Efficient Investment:

Time saved is money saved. Think of the time required for each of the following payroll processes:

  • Calculating payroll each time period.
  • Printing, signing, and disbursing salary.
  • Generating reports for in-house and accountant use.
  • Preparing and remitting payroll taxes and returns to government agencies.


Whether your business needs to outsource payroll services or not depends on many individual factors, and you should carefully analyze all the data before deciding to hire a professional or do your own in-house payroll management. Always exercise caution before hiring a payroll company. They will be handling a very important part of your business, so a high level of professionalism and customer service is very important. Finding and hiring a good payroll services provider will save you and your employees a lot of time and even money, allowing you to concentrate on more important parts of your business.
Such wide array of benefits has convinced thousands of companies to switch to an outsourced payroll solution.
So what are you waiting for? Look for a good payroll outsourcing firm, and get started today!!!

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