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7 Surprising Facts About Outsource Payroll Services

Jun 5, 2023 | Business, Tax & Accounting, UK Accounting

Why You Should Get Outsource Payroll Services for Your Business

Payroll is vital in the operation of a business, but it can be a tiring and time-consuming responsibility which is why Outsource payroll services should be considered. Imagine processing your employees’, withholding taxes, leave pay, and other benefits without the needed expertise—the risk of committing errors is high, which may affect your legal compliance.

But as outsourcing becomes apparent in the business industry, you can let an external service provider handle your payroll, giving you peace of mind and confidence. Keep reading to learn more facts about outsourcing payroll services in this blog!

7 Surprising Facts About Outsource Payroll Services

Optimized Time

As a business owner, time cannot be wasted. Every second, whatever your industry is, you can talk and provide services to your clients, market and sell your products, or manage your operations. Instead, you have to use this time to compute your employees’ salaries and taxes.

With the help of outsourced payroll services, you no longer need to think about such administrative tasks. You can allot more time to activities that are value-adding to the core functions of your business.

And suppose you have a human resource department instead of payroll computations in your company. In that case, they can focus on their primary task, which is people management, such as implementing projects and policies to help employees be more productive and engaged with each other.

Less Costly

If you decide to retain your payroll management in-house, you must have a payroll staff with enough knowledge of the involved accounting principles and legal requirements on payroll computation. In addition, you will need high-quality software for more accuracy of records and to reduce the risk of human error.

As your business scales up, with increasing employees, you will also need to expand your payroll department, which means additional resources are required.

Laying down the costs that entail in-house payroll management, outsourcing can be less costly than doing it in-house, especially if you have a growing business that will most likely have more employees. 

Improve Return on Investment (ROI)

One of a business’s key financial performance indicators is its ROI, which outsourcing payroll functions can massively improve. 

More income flows with lower expenses and more time to grow the business continuously. Moreover, with outsourcing, you don’t need to obtain costly payroll software and maintain additional hardware for it to function. 

Efficient Process

With outsourced payroll services, your payroll is managed with the latest software the subcontract service provider uses. Since they are specialists in this business process, they invest in the best software and system and use them to support your needs.

Once the payroll management is outsourced, the service provider will be responsible for correct and on-time payments, efficient payroll records, and answering employees’ queries regarding their salaries and benefits.

The effect of an efficient process on the employees is higher productivity. If their concerns are resolved quickly, and they get their salaries on time, they will focus more on their work. Additionally, this reduces the risk of high turnover of employees since they know they are being taken care of by the company.

Dedicated Payroll Professionals

For most businesses, payroll processing is just a small part of a large scheme. Yes, it is essential, but with other tasks needed within the company, it can take a lot of work periodically. On the other hand, payroll management providers have a team of experts dedicated solely to payroll. 

These experts are trained to do specific tasks related to payroll functions. However, the quality will still vary depending on your chosen service provider. Of course, it is undoubtedly better than the internal capabilities of most companies with different focus industries.

Improved Compliance and Accuracy

Leaving your payroll processes to the hands of third-party experts means escaping the need to worry about complying with laws, tax regulations, and their dreaded deadlines. You can sit back and relax as they do everything for you.

And with their updated system and expert staff in place, the accuracy of the computations is significantly higher compared to doing it in-house.

Updated with Changes in Regulations

Payroll management comes with complying with the laws and regulations, and we know these are changing. These updates to the law should be well-implemented in the processes and should not be left behind by payroll managers.

However, in reality, it can be challenging to stay updated at all times, especially if the staff is less dedicated than payroll service providers who do payroll management as a business.

Having your payroll management outsourced will give you the confidence that you have a set of experts with enough knowledge and are capable of interpreting and implementing any changes.

Frequently Asked Questions

  • What is the advantage of outsourcing payroll?

    As discussed in this blog, the most significant advantage of outsourcing payroll services is its ability to help a business save cost and time. Another one is the increased accuracy of payroll records and efficient payroll management.

    Lastly, since external experts have sufficient knowledge and training about payroll functions, you have confidence that your business complies with the laws and regulations regarding the correct payment to your workers and the right amount of tax to remit.

  • What is the risk associated with payroll outsourcing?

    Since you need to hand over some sensitive and confidential information about your employees, data security may be at risk. However, high-quality service providers care about their reputation in the industry, so there is a low chance of them breaching the non-disclosure clause in your contract.

    They also ensure they have encrypted servers and firewalls on their payroll systems, so the risk of data security loss from outside is slim. However, this risk will never completely go away.


Outsourcing payroll services has its advantages, but whether you should apply it to your business still depends on the nature of your operations, needs, and capabilities. It is best to study the benefits and the risks this decision entails. You may check our UK Payroll Services.

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