When does it make sense to outsource payroll?

 13 Aug 2018

Every business can benefit from increasing their operational efficiency and as an owner, this might be a primary burden you’re looking to achieve. A simple solution is to outsource any non-core business functions to external providers. 


What are non-core business functions?

These are functions that business are required to be involved in the business, but they’re the same for every business and add little to your business incoming revenue. Payroll is a primary example whereby it is essential, but it will not make any differences between you or a competitor out-reach to new business. In contrast, core-business functions are essentials tasks which have a direct impact on the incoming revenue of your company. These do differentiate you from the competition and are aspects you might want to keep in-house.


Who could benefit from outsourcing payroll?

There are not many businesses which would not benefit from outsourcing their payroll. The more legislation and requirements have made this process long-winded and complex, especially when you consider a large workforce, employee turnover and resolving all the paperwork involved in processing the payroll.


What would motivate you to outsource your payroll?

  • Re-assign the time previously spent on payroll

  • More time to focus on core business functions

  • Low monthly costs supplemented by even lower business risk

  • The ability to deal with increased payroll demands that match business growth

When would I know to outsource my payroll?

High Costs

Consider the number of employees and your own time consumed with payroll functions and whether this dedicated time is actually costing more to keep it in-house than outsourcing payroll providers.


We all make mistakes, some people would categorise them as making us human, but when it comes to payroll, you cannot afford to make any mistakes so it is worthwhile considering using a professionally managed service. Mistakes involving payroll generally return a high cost, through either problem with employees or government agencies. Both of which will lead to a large consumption of your time and as discussed, that’s a high price to pay.

Alternatively, outsourcing the payroll process to a professional provider who has the experience and systems in place to offer a reduced chance of making serious and financial errors. All resulting in an increased amount of reassurance that a non-core business function is lifted from your responsibilities. 


Managing the processes and individuals has the ability to consume lots of your companies time. Even more, if you’re an expanding business, your payroll staff will probably be undertaking multiple roles. Making these employees share their time between different responsibilities could have an impact on the number of mistakes made and have a negative effect on their efficiency.

In addition, you will also have to employ a manager to closely oversee the entire process to ensure all the information is correctly inputted, especially when you do not use professional payroll systems that identify manipulation and fraud. As a whole, this can extend the amount of time you have dedicated to a non-core business function.

Professional payroll bureau providers specialise in complex payroll and have the experience to deal with expanding companies. Their resources allow them to undertake payroll tasks more efficiently than most growing business in-house teams. This outsourcing solutions, allow you to reduce the burden of employees sharing job functions so they can realign their full attention to their core responsibilities. 

Compliance, Compliance, Compliance

When was the last time your payroll employees ensured they are up to date with all the compliance required? Hopefully recently for your businesses but it’s another worry and complication which can be alleviated.

A professional payroll service offers a knowledge resource to support any compliance issues you have experienced and ensure they are fully up to date with any payroll compliance including understanding the specific requirements assigned to your business.


Paying your employees and meeting your tax responsibilities is not an option. It’s a necessity. We’re all aware that employee’s move on and join throughout your business and payroll is no exception. However, payroll can never stop or be delayed in the process. You can never miss a payroll period for your employees or for tax purposes. 

Throughout, we’ve highlighted when it makes sense to outsource your payroll. Once you decide this is the future of your business payroll responsibilities, you’ll have lifted a large burden within the business so it can focus on core business function and work towards those annual targets. Outsourcing your payroll make sense for every business regardless of size, it’s beneficial to giving your business the best opportunity to enhance its efficiency and as a result, revenue.