HOW MUCH DOES PAYROLL OUTSOURCING SERVICES FOR SMALL BUSINESSES COST?

Payroll management is a crucial aspect of every business, irrespective of its domain area. While many companies choose to have in-house payroll systems, it is more beneficial for a small business to outsource their payroll management operations. First, let us understand what payroll outsourcing services entail.

What is Payroll Outsourcing?

As the name suggests, payroll outsourcing refers to hiring a third-party payroll service to conduct payment-related operational procedures for your business. Essentially, payroll services can range from maintaining records of employee salaries, depositing money into their accounts and dealing with government and non-government taxes associated with employee salaries.

Small businesses often do not have the resources to maintain an entire payroll department within their company, owing to low manpower and the possibility of a hike in costs. This is where outsourcing comes into play. Outsourcing an integral function like payroll guarantees expertise and experience. Further, it helps the small businesses to concentrate on their core strengths while specialized payroll firms can take care of the monetary hassles.

Pocket Pinch

The cost of outsourcing payroll operations varies according to the company that is hiring and the company that is being hired. A few important factors that influence the cost of outsourcing accounting and other payment-related operations are as follows:

Size of the workforce of the hiring company: More the number of employees, more the complexity of payroll processing

Company whose services are being outsourced: It often depends heavily on the expertise and reputation of the payroll firm that is being hired. Better the market goodwill and dexterity of the company in providing the services, costlier the packages.

Country of operation: Since taxes vary from industry to industry and can be country-specific, the host country of a company’s operations greatly influences the cost of outsourcing payroll services.

As per entrepreneur.com, in 2019 an organization falling in the small or medium-sized category may have to spend about $100 for each employee in a year if they wish to outsource payroll. While this may seem like a steep price at first, it should be seen as a long-term investment because it optimizes cost in the years to come.

Types of affordable payroll outsourcing

Most payroll outsourcing services understand that each company has its own set of requirements that needs to be fulfilled when it comes to payroll-related services, be it calculation and payment of wages or filing of taxes. To accommodate these, there are several service packages offered by the most firm. Each of these packages comes with a different price tag and you can choose whatever fits your needs and your budget perfectly. Usually, eminent payroll companies offer the following types of outsourcing:

Full-time services: This refers to hiring full-time payroll managing staff who have similar skills as compared to the on-site staff. This solves employee management problems and is priced much lower than employing in-house payroll experts.

Hourly services: You can hire payroll services for your company on an hourly basis for all or certain days of the week. This can typically be used during month-ends when salary is generally calculated. It is an extremely economical option for small-sized businesses.

One job at a time: One of the most preferred payroll outsourcing solutions, this option handles tasks as they come along. Once a business identifies a potential payroll function, it outsources appropriate services for that particular job. This option is cost-effective and since it has no long-term contract associated with it, it gives you the freedom to switch services for each job and find your best fit.

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Zubair is a digital enthusiast who loves to write on various trends, including Tech, Software Development, AI, and Personal Development. He is a passionate blogger and loves to read and write. He currently works at Unique Software Development, an artificial intelligence development company that offers top-notch artificial intelligence services to clients across the globe.