Normally, business companies outsource their payroll function to decrease working cost and improve productivity. Businesses can focus on core business activities with more time on hand. For that reason most company engage in payroll outsourcing to ease their work.

  1. Cost reduction.

Just how much do you pay the entire Human Resources department? Companies operating in small to medium scales may not even have an HR department or even an HR staff. They would most likely have one payroll administration office onboard. The salary for a payroll administrator may range from $8,000 to $12,000. You also have to consider one of your employees spend on encoding payroll information and what you pay for the technological support for payroll. Large scale companies have an entire IT department as a back-up, and small business has one computer guy or even hire a moonlighting IT expert every once in a while. Compare the total payroll-related costs to what you would need to pay for the services of a payroll outsourcing company.

  1. Focus on core operations.

Fact is, payroll work is mundane, and even the most loyal employee will feel so, even when she doesn’t complain out loud. Even when you get someone who doesn’t “mind” doing the payroll work, you can be sure that time spent on anything not payroll-related is time well-spent. This is because payroll work is by no means a strategic; it doesn’t play a role in branding or increasing market share or in generating product exposure. With payroll outsourced to third parties, your staff will be able to focus on core operations.

  1. Compliance.

Payroll outsourcing companies also offer tax administration services, and these are bundled with payroll services. This means that they get to carry out filing and tax-related work. What’s even better is that they know the ins and outs of the tax laws of your state so you can be sure that compliance to government tax rules and regulations is checked. You wouldn’t want frequent tax-related clashes with the government, would you?

  1. Good feedback from employees.

Let’s face it; nobody likes receiving paychecks which are incorrect. It is a hassle to have to consult the payroll officer about it. With outsourcing payroll work, you are reasonably sure that you are acquiring the services of people who can do the payroll-related tasks excellently.

  1. Accountability.

Alright, so you might have hired experts, but the truth is, glitches may not be altogether avoided. Paychecks may be delayed, and there could be problems with paperwork. However, you do not have to deal with a headache; it’s up to the payroll services company to take care of the problem. Now, if you don’t like what the payroll company is doing, you can use them or find another one. How easy do you think will it be to fire a payroll officer which you feel is not doing a good job at all, what with the labor laws of the country? With outsourcing, you get a lot of options.

  1. Speed.

Payroll companies have what it takes to get your payroll tasks done, regarding industry knowledge, legal expertise, and technology. This means that payroll processes are completed at top speed. Even when you are a small business who sometimes hires part-timers or seasonal workers, you can be sure payroll companies will have systems that can assist with that.

  1. Security.

A lot of business operators aren’t comfortable with the idea of third parties’ gaining knowledge about an aspect of their operations when the truth is payroll companies are good at curbing security problems. Not a lot of managers and owners have time to closely supervise payroll and note activities which spell f-r-a-u-d such as phantom employees. By outsourcing payroll and tax administration services to 3rd parties, you get to have a little peace of mind at least regarding payroll so he can focus on more important business aspects like polishing the supply chain or carrying out a marketing campaign.

  1. More Time.

When you just start your business, everything looks like very simple. You focus only on the core business activities. But as your business develops, things get more complex. You become more flooded with other aspects of the business that is non-core activities, time-consuming and unrelated, instead of being able to focus on the main business. Outsourcing helps to free up more time so you can focus on core activities in the business.


Dealing with payroll activities can be a complicated job even for the experienced business owners. Keeping track of payroll changes and regulations in withholding tables and calculating amounts can be a time consuming and tedious job. Sometimes, it will easily lead to mistakes, if you are working with the business core activities and doing the payroll simultaneously. Visit Blog: http://www.payrollserviceaustralia.com.au

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About the Author

Daniel Chapman