Payroll means employees’ payments including salaries, bonuses, taxes as well as deductions. In other words, payroll is the amount paid to the employees for their services to the company in a given period.
Payroll outsourcing refers to a business hiring an external party to manage its payroll, meaning that the service provider has to handle administrative and compliance functions of employees pay for the company. By outsourcing payroll, the company no longer has to hire and train in-house payroll staff, purchase payroll processing software and be highly aware of the complicated tax regulations. It could reduce cost and save time as financial tasks related to payroll are being outsourced. Payroll outsourcing is beneficial to all kinds of businesses regardless of their scale and size of payroll.
Some may wonder if businesses already have their payroll handling procedures and staff, especially for small companies, payroll outsourcing is simply not their thing. Rethink about it, running an in-house payroll is challenging in nature and without HR and accounting professionals make it even more devastating. Outsourcing payroll provides you with a group of specialists to handle your payroll without the risk of making mistakes and tax compliance penalties. It also helps the business to save cost by reducing the use of in-house resources including administrative overheads as the whole payroll processing has been outsourced.
It is crucial to determine the right timing for payroll outsourcing as different businesses are operating in various business models and their needs are different. The company that wishes to outsource payroll should assess its own circumstances ad the following factors are recommended to be evaluated. The number of employees on assignment, its local entity, the complexity of local laws regarding employment and withholding etc... If the time and cost of setting up, administrating and managing the payroll are unjustifiable, the payroll functions are recommended to be outsourced.
Payroll processing is inevitably one of the most time-consuming tasks for businesses. According to Technology Advice, 26% of small businesses spend up to 5 hours per month to manage their payroll. To take back precious time spent on payroll processing, there are tons of solutions providing an automated payroll process. Valuable time saved by outsourcing payroll allows businesses to focus on more strategic initiatives for organizations.
The financial cost can be saved if the amount of money the company is investing in manual payroll processing including pay calculation, regulations checking, software maintenance etc., is more significant than the price of hiring a payroll vendor, it may be more cost-effective to outsource payroll processing.
In many businesses, staff who are responsible for managing payroll have other job duties other than payroll processing. Yet, according to a Deloitte survey done in 2018, more than a quarter of respondents indicated that they spend most of their working time dealing with payroll tasks. As employees are juggling between many duties, it is easy for them to get overwhelmed and errors might occur, bringing in undesirable consequences. By outsourcing payroll processing, finance, payroll or HR team members can then put their energy to focus on more strategic tasks instead of spending all their focus on managing payroll.
Regulations, withholding rates, new forms, payroll laws change frequently, therefore it is highly common to make mistakes when companies are handling payroll processing manually. Mistakes cost not only money but also the company’s reputation. Hence, an experienced payroll provider could help to avoid mistakes by keeping up and implementing these new changes and processes such as tax regulation changes. Expertises are experienced and you need not worry about a single thing as they will be in charge of keeping the company’s payroll processing compliant with the government’s laws and regulations. Side note: according to Businesswire, HR and payroll departments spend around 36 hours per week on the company’s compliance matters. A professional team of experts will not only safeguard your company’s compliance but also save up the company’s resources.
Traditionally speaking, employees who are responsible for managing payroll are often juggling between several job duties and they do not have time to do research and study ever-changing regulations, government forms and withholding rates etc… Meanwhile, outsourcing companies have a pool of experts who are specialised in payroll processing with years of experience in the field and they will not only help you handle your payroll but also help you to understand complex payroll issues including laws and regulations if you outsource your business payroll to them.
Payroll processing is risky as it involves a substantial amount of confidential employees’ information. The safeness of in-house payroll software is questionable and online payroll solutions comprise technologies that can detect different types of payroll fraud. It offers a safe platform for handling and storing confidential data.
Previously, it has been going on and on about the ever-changing regulations and the importance of abiding by them because they are complicated especially for international businesses and the consequences of incompliance could be enormous. Delegating legal compliance to a trusted service provider is taking away a heavy boulder from the company’s shoulder.
As a leading human resources agency in Hong Kong, Zebra takes pride in providing professional and comprehensive end-to-end payroll outsourcing services with full compliance against local employment regulations. It automates payroll management and ensures accurate calculations of staff benefits and compensations. It reduces the costly inaccuracy from manual mistakes. Legal and human resources advice is also provided when in need. You don't need to feel worry about the payroll process after subscribing to Zebra’s ePayroll solution.