In many cases, companies outsource payroll because they’ve determined it to be more cost-effective than managing payroll in-house. This has historically been one of the main incentives for any kind of outsourcing, and payroll functions are no exception. The process of managing employee payroll is often time-consuming—unless, that is, another company is hired to take care of it instead.
- The right payroll solution will be one that provides positive answers for all three.
- Not having to spend long hours on administrative work affords employers the ability to focus on business growth initiatives, and improved accuracy can prevent costly penalties.
- Here’s a breakdown of the categories we used to rank the providers that made the top of the list.
- Payroll software should also integrate with benefits administration software for accurate deductions and with time tracking software.
- Outsourcing, on the other hand, means handing over your entire payroll process to another company.
Still, the process did not require any technical knowledge and each step was intuitive to complete. Signing up for the free trial was simple, taking only a couple of minutes. After inputting the code, I was asked simple questions about how I wanted to use the account, such as if I wanted to invoice clients or run payroll. It would have been far easier to just input a name and have an email be sent to the employee to do all of this work, leaving me to only approve its accuracy.
In small businesses, one person typically performs both bookkeeping and payroll functions. If you don’t have an accountant or bookkeeper on staff and don’t want to pay the average salary, or if you don’t have the workload to justify hiring a bookkeeper or accountant, then outsourcing makes sense. A PEO payroll service is a co-employer that manages your employee data and other core HR activities for your company, including payroll.
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This is especially true if you’re partnering with providers in unfamiliar markets, where there are significant cultural and language differences. In this article, we’ll discuss the pros and cons of outsourcing payroll, advise you on how to choose the right partner, and cover some best outsourcing practices. Payroll can be a complex, time-consuming process — especially if you have employees in multiple locations. There are multiple laws to comply with, tax edicts to follow, and a lot of data to manage. Most everything has its pros and cons, and outsourcing payroll is no exception.
What features do payroll outsourcing providers offer?
The best payroll software for your company depends on your business size and needs. Top payroll services for small businesses include OnPay, Gusto and ADP RUN. Traditional companies offer customizable plans to fit your needs while platforms tailored for startups offer straightforward pricing and all-inclusive packages you can get up and running in minutes. Look for a service that offers essential features like accurate payroll processing, tax compliance and employee self-service options. For example, maybe you have only a handful of employees now but want to grow in the future and will need more bells and whistles. Many online payroll services include features that help you administer benefits in the same platform, as well as integrations for accounting software.
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It also allows you to customize how you pay accounting for product warranties contracts with multiple pay options. Paychex Flex users posting on popular ratings sites say the platform is easy to use both on the employer and employee end. They also praise Paychex Flex’s customer support for being responsive, patient, supportive and knowledgeable. Using Paychex Flex, you can access the Paychex Preview Preprocessing Report, which allows you to review your payroll before it runs to remove any errors. You can also create custom reports, such as reports showing your cash requirements, job costing, tax deposit notices, W-2s and more in real time.
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The reviews of Justworks on popular ratings sites note that the service is easy to set up and use for both employers and employees, and is easily scalable as a company grows. Many wish that Justworks offered more in the way of integrations with popular accounting and other software, and some express the need for more customizable platform features. Gusto offers three plans for companies looking to manage payroll for both full-time employees and contractors. Gusto Wallet is a payment system that allows employees to receive their pay within the app or via a Gusto debit card.