At this moment, if you are thinking, “why do I need a third party to help me pay for my employees?” Just hear me out. There are several reasons that businesses are outsourcing payroll. But key takeaway here, is that handling an in-house payroll process is more laborious and time-consuming than one can expect. By payroll outsourcing, companies can:

Relieve HR Burden
First and foremost, it has been proven that payroll outsourcing organizations help reduce a company’s operational costs. According to recent market research, payroll outsourcing has helped companies result in a cost savings of 20% or more while decreasing in-house business costs. The reason is, payroll consists of a lot of thorough details and steps to complete. If handling in-house, a company would have to expand its costs on maintaining a robust HR department and hiring staff members to administer and monitor any sort of workforce activities. Other than that, the cost of maintaining a payroll software system can also be costly. By hiring a third party payroll outsourcing agency, such cost can be eliminated and the system can also be monitored by the agency.

When a company chooses to outsource its payroll process, the HR department can have its stress on payroll relieved and shift its focus to the company’s core business and human management.

Avoid Penalties/Violations
The other benefit of hiring a professional payroll outsourcing organization is to ensure better compliance and avoid penalties from violating the specific labor regulations and policies. When it comes to payroll, a different country has a specific set of rules to follow. For example, some countries like the US require employers to withhold a certain amount of income from employees as an income tax payment. Other places like Hong Kong require employees to fill out tax forms by themselves but demand employers to follow the MPF (Mandatory Provident Fund) guidelines. As business is going global, corporations often expand their branches to other foreign countries with little knowledge about their legal policies. Companies violating government policies may end up receiving penalties and fines, and these concerns can be eradicated with the help of a payroll outsourcing company.

Time-saving
After all, the main reason to outsource a company’s payroll process is to save time for other matters in the business. As mentioned before, payroll is a timely and redundant work that involves great attention to details. From recording each employee’s data and work hours, and handling new hires and terminations, to supervising benefit deductions for employees, and summarizing a comprehensive report, all these work demands a significant amount of time. Let alone the time spent on training a team of responsible and sensitive staff. This is when payroll outsourcing companies become handy – they take the stress away from you so you can focus on other important aspects within the company.