7 Outstanding Business Benefits of Payroll Outsourcing

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There will always be parts of your business that are vital, but may not necessarily be making your business money. One of these aspects is payroll, which is necessary for your business to function, but tends to take up resources without giving much in return. It should be no wonder, then, that so many businesses choose payroll outsourcing.

What is payroll outsourcing?

Payroll outsourcing is a business arrangement by which a company enters into a contract with another company to handle its payroll matters. Depending on the package chosen, this might include everything from keeping track of employee hours to physically cutting each paycheck. This arrangement allows businesses to focus on their primary goals while still being assured of the fact that their payroll matters are being professionally handled.

Related: Outsourcing Payroll to Meet the Needs of Your Business

What are the benefits of payroll outsourcing?

Outsourcing can be a scary word. Before you’re put off by the concept, it’s important that you know the benefits of payroll outsourcing. Below are a handful of the most commonly cited reasons why a company might want to take its payroll processes out of house.

payroll outsourcing

Better efficiency

Payroll outsourcing means sending your payroll off to be done by professionals. Typically speaking, this means that your payroll will be processed more efficiently and with fewer mistakes. Even at first glance, this ought to make sense – while your company’s payroll department is a larger part of a rather different business, the company to which you have outsourced your payroll concentrates only on payroll matters. This is a situation where outsourcing to experts really does help.

More secure

Outsourcing is often more secure. While sending out your payroll might seem risky, the truth is that most payroll security issues occur in-house. Again, payroll companies concentrate only on payroll, so their security measures are created specifically with payroll in mind. If you want to make sure that your payroll data is secure, you should trust a company that’s in the payroll business.

More hiring flexibility

Outsourcing payroll allows you a greater degree of flexibility in hiring new employees. Instead of having to continually staff your payroll department as your business gets larger, you can shift that part of your workforce over to the parts of your business that will actually make you money. This can be a perfect choice for those businesses that are in a growth cycle but who still can’t spare employees for those aspects of the business that are not considered part of their core competency. If you need to do the most with a limited number of employees, you need the flexibility that comes with outsourcing your payroll department.


Every business has certain laws that it must follow when it comes to payroll. Be these issues of record keeping or tax compliance, breaking the rules can cause major financial and regulatory issues for the company. Fortunately, a good payroll company can help to ensure that your company is following all of the relevant regulations even as it processes your payroll each month. If you’d rather not deal with the headaches of keeping up with compliance in-house, outsourcing this process might be your best way to remain in compliance with the law.

payroll outsourcing

Reduced costs

Processing payroll is more expensive than you might think. It’s not just the cost of hiring and paying payroll staff, which can be significant on its own, but rather the cost of keeping the department moving. This means investing in both hardware and software, constantly updating security measures, and continually hiring more skilled personnel as the needs of the company grow more complex. Simply put, this kind of investment just doesn’t make sense when there are more budget-friendly alternatives out there.


Outsourcing your payroll also allows you to scale your payroll needs as your business changes. There’s no more scrambling to hire more people every time you expand, nor will you have to change systems as you deal with new classifications of employees and contractors on different projects. Once you’re working with a payroll company, making changes is as simple as consulting with the company and making a few alterations to your current agreement.

Access to better technology

One of the overlooked benefits of outsourcing is getting access to better technology. Payroll technology is always changing, but most businesses can’t afford to be on the cutting edge. Since payroll companies depend on technology to provide their services, they’ll make the investments that your business cannot. This means that you’ll always have access to the best in the industry, even if you don’t have to go through the painful process of upgrading yourself.

payroll outsourcing

Closing thoughts

There are many benefits of payroll outsourcing, some of which might be more attractive to your business than others. What’s important, though, is that you know the benefits of this kind of business arrangement so that you can make the kind of choice that will best serve your company. If you’re ready to seriously consider payroll outsourcing, make sure to visit PayTech, and take a look at our pricing and packages today.


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