Outsourcing vs. In-House Payroll: Which Is Better?
Business owners are spending as much as five hours each pay period handling payroll services. While that may not seem like a ton of time, it adds up throughout the year.
That’s why so many businesses are considering outsourcing those services to leave time for more important tasks.
Are you one of those small businesses that are considering outsourcing vs. in-house payroll services? Then keep reading to learn these differences and how to best choose the right option for your business.
Difference Between Outsourcing vs. In-House Payroll
In-house payroll is when you, or a team member, handles all activities regarding payroll, such as time-tracking and creating the paystubs. This person works for your company and is in charge of compiling the payments and making sure they go out on time.
Outsourced payroll is when you hire another company to handle your payroll services for you. This company or person doesn’t work directly for you; instead, they consider you their client. You would have your employees enter their information into the payroll provider’s software and handle the payments.
Each of these has their own advantages, and work well for any company depending on their needs.
What Are the Advantages of Outsourced Payroll?
Outsourced payroll is great because you get to let the professionals handle everything. They do this every day and know-how to get it done effectively and accurately.
You also can mitigate the risk of fines or violations since they know what they’re doing; they know how to stay compliant. You also can feel confident that you’re taking out the correct amount of taxes.
Outsourced payroll is also ideal for someone looking to save time by reducing these tedious, repetitive tasks. Payroll service providers can also help keep your data more secure and reduce the risk of sensitive information being leaked. Ultimately, outsourcing your payroll will give you peace of mind knowing it’s being handled the right way.
What Are the Advantages of In-House Payroll?
When you keep your payroll services in-house, you’re able to be in charge of every aspect of it. You have full control over when people get paid when the checks go out, and what’s included in them.
Also, while the outsourced company may tell you they’re in full control, if anything does go wrong, ultimately, you’re on the hook. It’s still your duty as an employer to pay your employees.
Is Outsourcing Right for Me?
Now that you know the differences between outsourcing vs. in-house payroll services, it’s time to decide if it’s right for you. Think about how much time you spend on payroll and what else you could be doing during that time. If you feel your time is better spent elsewhere, then outsourced payroll is right for you!
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