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Payroll is the bane of many business owners. We often scramble to have our workers paid their dues properly and on time. But while it’s one of the most important obligations you have to your employees, payroll can often become too stressful to handle in-house.

This is one of the reasons why many companies, no matter their size, prefer outsourcing their payroll to other specialists instead. This might be a good idea for your enterprise too, so let’s review how this works and what its advantages are. 

What Makes Payroll Challenging?

To understand why so many businesses hire payroll services, we first need to learn what it is about payroll that causes so many struggles. 

Some of these challenges include:

• There are actually many tasks involved when processing payroll all of which can be time-intensive. These include tracking work hours to reconciling deductions. 
• Payroll-related data can have sensitive employee details. Without a stringent security system, the information would be at greater risk of being exploited in fraud and data breaches. 
• Minor miscalculations can lead to problems like underpaid employees or incorrect social security contributions. These can lead to irate workers or even legal repercussions. 

How Does Payroll Outsourcing Work?

When you outsource, you hire a third-party company to manage your business’s payroll functions. Here’s a general look at how it works: 

1. First, you choose your provider based on your company’s needs. Some specialise in large corporations, while others are more suited for SMEs. 
2. You then give the payroll service the relevant details regarding your employees. These include the hours worked, wages, and benefits per employee. 
3. The provider then configures the payroll system based on the data provided and the local laws affecting payroll, such as personal income tax rates and social security contributions. 
4. When it’s nearly time to distribute payments again, the payroll handlers calculate the pay and deductions per worker. They also file the tax returns to the authorities. 
5. Payslips are then distributed to employees, and the payments are issued through direct deposit or the worker's or company’s other preferred methods. 
6. The payroll provider also sends reports and summaries to the employer for record-keeping and auditing purposes. 

Key Benefits of Hiring a Payroll Management Service

So how does having someone else handle payroll make your business better? 

• Free Up Valuable Time - You and other workers who previously worked on payroll would now have more time for actual work matters, such as recruiting more talent or improving employee satisfaction. 
• Minimise Errors - With professionals calculating the pay, there is less chance of mistakes that could cause conflicts among your staff. 
• Better Data Security - A reputable payroll service already has the infrastructure and data security measures in place to protect the sensitive data you share with them. 
• Scalability is No Concern - Outsourcing your payroll also lets you scale up with ease — the provider’s payroll system can likely accommodate a large number of new workers much faster than if you did it yourself. 

Be Ready Before You Outsource

Here are a few things you should prepare for:

• Prepare the Data Beforehand - It would be prudent if you’ve already organised all necessary employee records to speed up the onboarding process with your chosen provider. 
• Align Your In-house Systems - Do make sure your time-tracking software and other HR platforms can integrate with the payroll service’s tools.
• Let Your Workers Know - You should also notify your employees about the changes and how they will benefit the organisation. This lets you address concerns early on instead of dealing with them after you’ve started outsourcing. 

Working With Experts Pays off in the End

So start the search for a payroll service today. The sooner you let them handle your payroll, the faster you can reap the benefits.