What is Outsourced Payroll?

Payroll is not simply handing out a pay slip once every week or on a monthly basis. Behind the scenes, there is an

individual who must take into account all the numbers and do the calculations for additions and deductions to and from gross

salary. These additions and deductions are usually calculated taking into account some or all of the following:

• Commission


• Bonus


• Loan Repayment


• Personal Tax Allowance


• National Insurance


• Pension Contributions


• Union Contributions


• Charitable Donations


• PAYE.

All or some of the above are taken into account so that an employee can receive an accurate pay slip based on what they

have done for the company. They only receive their pay slip after all of the applicable allowances, additions and deductions

have been applied. Hence, the reason why an employee's pay slip shows the gross income figure and the net income amount which

is their actual take home pay after deductions.

Traditionally, Payroll has been managed within the company, but as changes have taken in business process management,

Any company despite its size can benefit from Outsourced Payroll due to the range and size of providers offering this

service.

What is Outsourced Payroll? It is a service that covers all of the aspects of payroll, but managed by an externalprovider.

It is often more cost efficient for a business to pay a payroll service to take care of their payroll needs. Why is this?

If you own a small to medium sized business, read on.

1. On average, a small company will end up paying HM Revenue & Customs penalties for events that could have been avoided.
   
   Typically because they have made a mistake or filed late. Generally, Outsourced Payroll services will take full
   
   responsibility for any mistakes made which saves the company money.



2. It saves money to outsource. A bookkeeper in some instances can be more expensive, even if just part time.



3. Elimination of payday stress as your employees will get paid. Most company owners experience such a relief as they let
   
   the tensions of pay day fade away.



4. Outsourced Payroll allows you to offer direct deposit to your employees. Employees love this benefit because they are
   
   able to skip a trip to the bank each pay day.



5. On many occasions a small business can become overloaded with work and miss preparing payslips and cheques. This can be
   
   very frustrating to their employees. An Outsourced Payroll Service removes the additional administrative burden and provides
   
   peace of mind for the business owner and ensures employees are paid on time. This takes away the worry of pay day
   
   administration worry for both employer and employees.




6. Financial software is constantly changing and can be expensive to support with internal staff that are managing payday
   
   administration. Using an Outsourced Payroll Service will remove the requirement to maintain and support internal payroll
   
   software systems.




7. Payroll rules and regulations are liable to change and any internal software will require updating. By outsourcing the
   
   payroll, any applicable changes in HM Revenue & Customs regulations are managed by your provider.



8. One of the greatest attractions of Outsourced Payroll Services is the removal of depending on a single employee to
   
   manage and process the payroll. Issues such holidays and sickness disappear as the responsibility now falls on the service
   
   provider to ensure a consistent and efficient service.

Outsourced Payroll is gaining in popularity as it can save money, time and eliminate many of the administrative worries

associated with this all important business function.