What exactly is payroll outsourcing?
Payroll outsourcing is all about hiring a 3rd party company to deal with the various intricacies of payroll within your company. A service provider that handles payroll will help to ensure everything is in order including:
– Ensuring all of the payments are made on time and according to the contract’s specifications.
– Ensuring all paperwork is fully in place.
– Being responsible for handling the payments made to your employees. This is contrary to what a lot of people think. Many assume that outsourcing payroll tasks mean you will be getting help with the hiring process. That’s not true whatsoever. You can outsource these tasks, but you will need to hire a different company. Some companies handle both of these tasks, but you need to find one that advertises both.
If you are looking for top of the line global payroll providers then look no further than TopSource Worldwide.
How does outsourcing payroll services work?
When you hire a third party to handle your company’s payroll, you will need to provide them with all of your employee’s information. This means you need to ensure they have the requisite DPA in place. Otherwise, you could find yourself in legal hot water. You want to ensure they are keeping the data secure otherwise you could run into legal issues if they mishandle it.
The company you hire will need a couple of things from every employee including:
– Their personal information.
– Their rate of pay.
– Their respective job title.
– Their hiring date.
– The type of contract they have.
If you issue all of your employee’s timesheets or you leverage time-tracking software, you’ll want to ensure you are giving the payroll company this information or access to it. That way, they can facilitate accurate payments on time automatically.
Likewise, these providers can be beneficial because they can take on payroll taxes. They can do this to ensure you remain compliant with all of the regulations no matter where your employees live or are located. You will be responsible for delivering the right tax forms and all of the requisite information they need. These things may include their social security numbers and other identifiable information.
Payroll processing by a specific service provider is likely to include some of the following steps:
– The Setup Period
This is when you will deliver all of the important information to the company. They will tell you everything you need and you will be confirmed that all of the information is accurate.
– Pay Period
During the pay period, the provider is going to require all of the hours worked by every employee. This will ensure they can enter the information as accurately as possible to calculate all of the wages, salaries, and taxes. You will need to verify that the information is accurate.
– Deductions
Whenever they calculate all of the gross pay, they will handle the pre and/or post-tax deductions if applicable. These can include everything including employee benefits, child support, and other taxes.
– Net Pay
Whenever the total net pay is calculated, the provider will make the various deposits needed and they will deliver all of the checks to your employees to ensure they are getting paid accurately and on time.
As the owner of the business, you will get all of the reports every cycle.
What options do you have for outsourcing?
According to various studies, there is exponential growth in this field. More and more companies are continuing to recognise the benefits of outsourcing their payroll. Thus, the total number of companies that do it are only going to continue to grow. There have already been a lot of changes to the industry and more and more companies are popping up because of the tremendous growth potential within the industry.
Right now, you can choose among different options including:
– Full-Service Companies
You can hire a full-service payroll company that will deliver you a lot of unique benefits. Not only will they provide you with broad experience handling all payroll tasks and issues, but they will also be able to ensure you remain tax compliant.
– Hiring a PEO
When you hire a PEO, you will get Human Resources services along with it. This ensures you can have a single company handling a lot of the day-to-day tasks involved with hiring and managing employees. However, this will cost a lot more than hiring someone that specifically focuses on payroll tasks.
– Software
You could always consider investing in optimised payroll software, This software can automate a lot of things, but you will still have to put time and energy into manipulating it. It’s not going to handle everything on its own. You’ll need to do some work to keep it going. However, it’s much better than doing things manually.
– Hiring a Contractor
You could always consider hiring someone to handle the payroll tasks for you without necessarily bringing them on board. You can outsource it to a contractor that works on a per-project basis. This can save you money from hiring someone to handle it in-house, but it will also require you to ensure your contract is ironclad to avoid any issues.