A recent study revealed 49% of workers would begin searching for new jobs after only two issues with their paychecks. Among these issues include incorrect payments, over-payments, non-payments, and delayed payments.
Payroll mistakes such as errors on tax forms, misclassifying employees, getting employee details wrong, or not maintaining adequate payroll records might cost you heavy fines and fees and possible reputation damage.
Yet, many small and medium-sized businesses incur penalties due to incorrect payroll filings each year. The solution to these issues is simple: use payroll outsourcing.
What is Payroll Outsourcing?
Payroll outsourcing means using a third party to handle the administrative and compliance tasks of paying employees and remitting payroll taxes. Payroll processes are often tedious and time-consuming; hence outsourcing payroll helps take that burden away from your team.
In addition, payroll outsourcing helps businesses stay compliant with federal laws, save time, and access the latest technology. The ROI of payroll outsourcing for small businesses can be positive; small and medium-sized companies that outsource payroll save over 18% of revenue versus businesses that handle payroll themselves.
Why Outsource Payroll?
Different companies outsource payroll for different reasons. However, below are 5 key reasons why you should outsource payroll:
Payroll processing is a very time-consuming process. Keeping track of new hires and terminations, benefits and deductions, garnishments, paid time off, as well as staying on top of government regulations can be exhausting. Each year, you spend many labor hours preparing W2s and other forms, which you must submit on time.
Outsourcing payroll frees up your time to concentrate on the core business priority tasks that positively affect your bottom line. Performing those repetitive payroll tasks could take your time away from performing other tasks that contribute directly to your business's key goals. If you are already an in-house HR employee doing payroll, outsourcing payroll will help your in-house human resource personnel concentrate on building strong relations with employees, making your company an employer of choice.
Additionally, outsourcing payroll can help you avoid unexpected time losses when you make payroll errors or receive a payroll audit. Your payroll service provider will help you avoid these mistakes and let you focus on your business.
Better Access to a Team of Experts
Most business owners and HR employees do not have time to study and research constantly changing regulations, government forms, and withholding rates. But by outsourcing payroll, a business can access experts who were previously only available to big companies. The most valuable payroll companies have experts who can handle payroll and HR functions.
By outsourcing your payroll, you can access a team of experts specializing in compliance with government regulations, verifying data, tax obligations, as well as identifying and minimizing risks before they pose bigger problems
Use the Latest Technology
Most small businesses do not have access to the latest payroll software. Outsourcing payroll will give you access to the best-class software the consolidates payroll, time and tracking, benefits enrollment, and other functions.
Outsourcing your payroll will help you avoid the technology advancement costs while ensuring you have the latest payroll software.
The cost of processing payroll can be greatly reduced by outsourcing payroll. If you operate a small or medium-sized company, employing an in-house payroll staff is a money burner. When you consider the wages and benefits you need to pay, the cost of in-house payroll staff is much higher than the cost of outsourcing payroll.
Penalties for omissions, errors, or late payroll tax filings can cost your business a lot of money. Government regulations are always changing, making it challenging for business owners to stay on top of these changes.
Fortunately, outsourcing payroll can help your business achieve compliance. Professional payroll service providers stay updated on the most recent regulations, rules, and changes in payroll taxes. In addition, an outsourced payroll services provider is less likely to make tax errors than your in-house employees. They will ensure your business stays abreast of all payroll-related laws and remain compliant.
However, a dedicated payroll processor can only keep you compliant with payroll-related laws. For total HR compliance, you should consider a more comprehensive HR outsourcing service.
A Reliable Payroll Solution for Your Business
Comprehensive outsourcing of HR functions will help your business achieve full HR compliance. Your outsourced HR experts stay on top of the changing government regulations and payroll taxes, helping your business stay compliant.
In addition, outsourcing comprehensive HR functions helps your business access cost-saving on employee benefits and workers' compensation insurance. Outsourcing all your administrative tasks in your business will free up your time, even more, allowing you to concentrate on other activities that contribute directly to your business's core goals.