Payroll outsourcing is a very common and growing practice these days. Payroll is an important business function that deals with the process of paying employees for services rendered. Payroll outsourcing can be defined as the accomplishment of a payroll task by some external agency. There are many reasons why companies outsource payroll, but the most prominent benefit lies in the fact that it often saves money. Basic payroll outsourcing services include calculating paycheck and tax obligations for each employee, printing and delivering checks, and providing management reports.
Every business owner knows that handling payroll can be a headache. Preparing payroll internally can cost valuable hours of employee time every pay period, and require expensive accounting software and training. Besides, the person handling payroll of an organization internally needs to keep up to date with changes in personnel, deadlines, and tax requirements on an ongoing basis. Payroll outsourcing is an affordable way to take away these burdens, because it is a time-saving and cost-effective alternative to internal payroll processing.
Payroll actually commences with the worker signing up with a company. A typical payroll report contains items such as gross hourly wages and gross salaries, bonus payments including stock given as a bonus, overtime pay, severance pay, per diem and travel allowance, and contributions to deferred compensation by employees.
Today, payroll outsourcing is a vital part of an organization’s payroll and benefits functions. This will improve employee satisfaction and enable the organization to focus its assets on mission-critical areas. The market for payroll outsourcing services is competitive and there are a number of key points, such as speed, accuracy and ease of use, to consider when opting to use a payroll company.
Though payroll outsourcing may prove highly valuable for many organizations, it also has many drawbacks. It is essential that every company precisely assess its requirements to determine if outsourcing is a feasible alternative.