6 Best Payroll Outsourcing Companies for 2024
We considered a number of companies, and they all brought something different to the table. We ultimately selected ADP, as we found they offered the best overall package and the level of support we were looking for. The voluntary security and compliance standard SOC 2 is also recommended because it has clear guidelines on how to deal with sensitive data. Keeping everyone in the loop helps manage expectations, ease any worries or uncertainties, and ensure your team feels informed at every step. As mentioned, the potential cost savings of outsourcing can be significant — depending on the size of your business and your circumstances.
It’s no surprise, then, that many organizations are outsourcing their payroll — or at least considering it. But outsourcing isn’t necessarily the right approach for every business. There are numerous things to think about, not least of which is the importance of choosing the right payroll partner. This category of features ties in closely to some of the payroll concerns. If you’re just using software, either the tool can pay your people or accumulated depreciation and depreciation expense it can’t. There are plenty of features, functionalities and benefits that a given business might need from their payroll support vendor.
In turn, employees use the app to access and update their personal data and tax documentation. The app also offers Touch ID and Face ID authentication to ensure only authorized access. Gusto Wallet is a payment system that allows employees to receive their pay within the app or via a Gusto debit card. Within the app, employees also receive pay insights that show month-over-month income patterns.
Paycor
You may want to schedule regular check-ins to stay in sync, and have a dedicated point of contact in the payroll company. This is why you need to pick a payroll partner with ironclad security. Your partner should use encrypted systems, follow the strictest data security practices, and comply with all relevant data protection laws (like GDPR in Europe or the CCPA in California).
In many cases, companies outsource payroll because they’ve determined it to be more cost-effective than managing payroll in-house. This has historically been one of the main incentives for any kind of outsourcing, and payroll functions are no exception. Once information has been exchanged and procedures established, the payroll outsourcing provider begins its actual duties. This almost always involves distributing pay on a clearly defined schedule (every two weeks is popular). As with performing payroll functions in-house, applicable taxes must be withheld by the provider before payments are made. Outsource some or experience gain loss all HR tasks and opt for a partner that is an extension of your current HR staff.
- Ideally, there will be an API option, too, so that you can customize your integrations.
- Evaluate the cost and the time it takes to process payroll every week.
- Finding a trustworthy third-party provider goes a long way, but a company can’t just pass off any payroll mistakes that arise as the fault of its provider and move on.
- The most basic plan offers payroll tools, while subsequent plans offer more in-depth HR tools.
- When a company keeps everything internal, these types of risks tend to go down.
How long does payroll take to process?
Clarify from the start what exactly is covered under the provider’s base fee, and what (if anything) is going to cost extra. Cover your bases, ask about hypothetical scenarios, and don’t just focus on standard payroll operations costs. For instance, some providers incorporate hidden termination fees when an employee leaves, or charge sizable sums to transfer to a new provider. Find out, in detail, what kinds of security measures they have in place, including official security certifications and protocols. If possible, consult with your own in-house security experts (or, if you’re unsure, ask an independent security expert). If your potential payroll provider is unwilling or unable to give you this information, it may be cause for concern.
For example, when running biweekly payroll, not all employees were selected, so you have to be sure to check that all the right people are included for each payroll run. Outsourcing payroll means giving up direct supervision of at least some of its many processes. A New York- or San Francisco-based company that keeps payroll in-house, for example, must pay “big city salaries” to attract the right employees for managing payroll, just like the rest of its internal workforce. If many hours of work can instead be assumed by third-party employees somewhere with a lower cost of living, the outsourced functions tend to become cheaper to perform. Allowing a third party to direct company funds and manage highly sensitive information may once have been unthinkable.
Decreased Data Security
We recommend checking out our 2024 guides for the best cheap payroll services, best payroll services for small businesses and best PEO services. Companies that hire a payroll outsourcing provider may also want to outsource PEO or HR services. Their services generally include managing employee benefits, tax filing, and human resource functions like cash conversion score for cloud companies onboarding and evaluating health insurance providers. Payroll outsourcing costs generally depend on payroll frequency, total number of employees and the specific services that are being outsourced. In most cases, there is a per-payroll processing fee and an annual base fee. ADP works with employers to determine the right payroll setup for their business, whether it’s a start-up company or an international enterprise.
Lower costs
When you choose the right HR solution, outsourcing can be a cost-effective option. You gain access to skills and expertise without the overhead that comes with additional staff. For example, you’ll save money on computers, office space, benefits, and more. When you’re dealing with payroll across different countries, rules can vary massively, including regulations tied to wages, overtime, taxes, social security, and data protection. To make things more confusing, these laws change often — and slipping up can have serious consequences. By outsourcing all that work to a payroll provider, you save an invaluable amount of time and resources — especially if you’re a small business.