In this article, we’ll discuss the pros and cons of outsourcing payroll, advise you on how to choose the right partner, and cover some best outsourcing practices. For most of the 20th century, companies strove to own and exercise control over all business functions and assets. Economic theories of the day nonrecurring vs recurring expenses advocated growth in all reasonable directions to exploit economies of scale. This mindset of vertical integration extended into companies’ internal processes as well. It wasn’t until the late 1980s that many companies, hindered by bloated internal structures, began to see broad strategic value in “hiring away” work once completed in-house.

Despite this, OnPay’s software is surprisingly robust and makes a solid case for its use, all on its own. As the name suggests, outsourcing payroll refers to the practice of hiring a third party to shoulder the responsibility of processing your worker’s salaries. This guide is intended to be used as a starting point in analyzing an employer’s payroll obligations and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter how to use your uber 1099 and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.

What Is Payroll Outsourcing?

1. They can ensure you avoid any common mistakes, and move toward the new setup with minimal business disruption, including compilation of existing data and any checks and validations that are required along the way.
2. It also includes managing information relevant to the tax process such as health insurance and workers’ compensation claims.
3. Whether you’re looking to save some extra time or are interested in additional HR features, outsourcing your payroll could be the right choice for your small business.
4. Their suite of offerings help teams keep a pulse on the employee journey, from candidate to coworker to former staff.

With HR outsourcing and PEO services, compliance support, and even AI-powered capabilities, ADP is a leading brand, and one to be reckoned with. And, with robust and customizable integration options, it’s well-suited to fitting alongside existing workflows and tech stacks. Choose to partner with ADP as a professional employer organization (PEO) for full outsourcing. Gain dedicated experts and powerful technology for HR and Payroll plus Fortune 500®-caliber benefits, workplace safety, and workers’ compensation claims assistance. No matter how well your small business is doing, it’s normal for owners and managers who process payroll manually to approach each pay cycle with a sense of apprehension – and maybe even a teensy bit of foreboding. Alternatively, to make things easier again, you can simply partner with an all-in-one global HR provider, like Remote, and have everything under one roof.

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. If outsourcing payroll seems like the best next step for your small business, consider using payroll software. With payroll software, you can easily integrate with your current operations, automate your payroll process, and access 24/7 support from payroll experts. Naturally, the quality of payroll outsourcing will vary, but it’s clear many companies still see these third-party payroll managers as more effective than internal capabilities.

What features do payroll outsourcing providers offer?

Simple outsourcing options allow you to manage payroll data from a phone or desktop application, while higher-value options allow you to connect directly with expert support. With the help of technology, the entire payroll process will be more efficient and accurate. For example, there are a number of modern payroll trends that can support ‌teams of all sizes. These include automation, cloud-based global solutions, and stronger data security. 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.

What is payroll processing?

For example, they should comply with data protection laws such as the GDPR. Choose an efficient payroll management solution like Remote and avoid any major issues. Meeting your payroll requirements will be a breeze, and you can support team members anywhere in the world.

If you’re not sure where to start, this blog is your complete guide to understanding outsourced payroll services and whether they’re right for your business. However, Bambee is better suited for small companies with simpler payroll cadences since it does not support employee self-service, time-tracking, nonprofit needs assessment or HR software integrations. You’ll likely need a more advanced platform with custom automations and support for international employees as your business grows and diversifies. But Bambee is an affordable starter solution, with automatic tax and HR support to reduce risk. Paychex is yet another top name in payroll software, support and outsourcing. They have solutions for solopreneurs all the way up to enterprise-level organizations.

Why you should choose QuickBooks to be your payroll provider

It may also lead to a hard time complying with the IRS or labor laws, and employees may experience frustration due to long wait times for paychecks. With an in-house payroll department, you have to pay your internal team’s salaries, benefits, and payroll taxes. You must also cover training to help your team keep up with the latest tools and trends. Wherever money is being handled and transferred between two parties, there’s always the risk of fraud. And it’s not just theft — you also need to consider your employees’ sensitive data and ensure you’re complying with local data privacy laws.