6 Reasons Why You Should Outsource Payroll

Compensation and benefits

Payroll is a necessary evil for many small business owners. It is not about paying the employees but the process involving the payroll. The employer needs to deposit the amount in each employee’s account one by one. Plus, the calculation of the compensation of how much each employee will get each month is very tedious.

Reason – 1

Business owners have a lot of responsibilities and they need to make sure they allocate their time responsibly. They cannot be wasting their time on low-value tasks when there is a high-value task that requires their attention.

Yes, we are calling the payroll process a low-value task, because it does not require much thinking and only requires the person to calculate the amount each employee will get and deposit them accordingly.

Now, this job can be done by some other person instead of the business owner. The time spent on this low-value task can be invested in other high-value tasks as planning to introduce a new product or how can they make their business more efficient etc.

Reason – 2

Compliance with Employee legislation and Taxation is very important for any business. As the owner, you have other things on your plate and you can’t be always up to date with employment legislation and taxation rules.

If you mess up and do not comply with these rules, you can end up paying huge fines and some may open your business up to lawsuits. These things happen often and if you mess up it is understandable and that is why you need to hire professionals who deal with payroll.

Reason – 3

Employee satisfaction is a major part of any business. Most employees have families and mouths to feed. If you do not have a consistent time frame where you clear the payroll of your employees, it will hinder their motivation to work.

Some families live from one paycheck to another, if you do something which delays their payroll, it is normal for the employees to be upset.

To make this process efficient you should consider outsourcing your payroll services into a professional company. You can turn to sites like Globalization Pedia if you’d like trustworthy suggestions for providers in your local area. Outsourcing payroll makes sure your employees get paid within a fixed time which helps keep them happy.

Reason – 4

One misconception about outsourcing payroll is it costs money. Yes, it is true the company you will outsource the payroll to will charge you a certain amount but that is less than the amount you will be spending.

If you measure the time you will spend processing payroll, which we will account for opportunity cost. The payroll software you will be using will cost you a fortune, plus it will become obsolete within a few years.

Outsourcing payroll will not require you to break the bank; they charge you $10 per employee per pay. So, if you have a total of 100 employees and you pay them monthly. You will have to pay 1000 dollars. This is minuscule considering the time and money it will save you in the long run.


Outsource payroll companies have top of the line HR tools. Many outsource payroll service providers have a dashboard that will keep track of starting from the employees on leave to how happy your employees are. Your employees can even make vacation requests and you can even check it. Helping you and your employees to be up to date.

Having this sort of software in the house as a small business is very expensive. Plus, your employees will require a long time to learn. The payroll companies will give your employees the basic training necessary to use their software, so the time is taken to learn decreases significantly.

Reason – 6

If you are looking to expand your business internationally, you can partner with a PEO company to recruit and handle the payroll of your international employees. Plus, they help your business to establish sooner compared to registering your business in that country.

These are some of the reasons we believe outsourcing payroll can be beneficial to small businesses. Share your opinion down below in the comment sections.