6 Reasons to Opt for Payroll Outsourcing in 2024

PEOs offer a wider range of HR and employment support, while payroll services are focused specifically on payroll processing. PEO plans are typically structured on a per-employee, per-month basis, with businesses paying a fee for each employee that is enrolled in the plan. The fee may cover a variety of HR and employment services such as payroll processing, benefits administration and compliance with employment laws.

How your team uses an online payroll system will vary depending on the size of your team, the expertise of your employees and the system you use. Most services come with excellent sales and customer service reps who can help you get set up and answer questions you have along the way. To change pay rates or correct time worked, I only had to click on a cell to input the new data point.

Take the time to make sure a provider is both trustworthy and experienced to minimize these inherent risks of outsourcing. The only types of businesses that identify payroll management as a core function are, well, the payroll outsourcing providers themselves. Outsourcing payroll stands to greatly reduce a major administrative distraction for most companies, allowing them to “cut the fat” from their employee rosters and keep their organizations focused on other tasks. It’s vital to complete tax-related tasks accurately and make payments on time, whether to the hurdle rate vs internal rate of return irr state or your employees.

TriNet: Best for hiring and onboarding

The penultimate entry on the list, OnPay, is a software-only payroll solution, offering only self-service online portals. In other words, if you’re hoping to use a third-party vendor as your de facto HR department, OnPay is not the right pick. Despite this, OnPay’s software is surprisingly robust and makes a solid case for its use, all on its own.

1. PEOs like TriNet are a good fit for small businesses with complex hiring and potential business liability—for example, if you hire international employees or have a lot of turnover.
2. When I clicked on an element of the pie chart, a screen popped up to show more granular data regarding the broader data point represented in the graph.
3. Using a full-service solution that combines payroll, HR, and more in one platform—like Deel does—will provide even more valuable insights.
4. You need comprehensive payroll and HR solutions that empower your people and unlock your teams’ potential.
5. This scalability eliminates the need for additional investments in HR infrastructure, enabling your team to focus on your core operations.

Managing and paying your people has never been easier

Overall, though the interface is cluttered, everything I needed was easy to find. Nothing I experienced was particularly confusing, but some tasks were a bit more labor-intensive than I preferred. Detailed analytics are also offered in color-coded pie and bar charts for a straightforward interpretation of data. When I clicked on an element of the pie chart, a screen popped up to show more granular data regarding the broader data point represented in the graph. The Forbes Advisor Small Business team is committed to bringing you unbiased rankings and information with full editorial independence.

Payroll Outsourcing Benefits

Each data point receives a weighted score, which is then totaled to determine the final ranking. AlphaStaff promotes the flexibility of its PEO services to provide an HR solution that’s customized to meet your company’s unique needs. It sells a comprehensive suite of HR services that begins with a human capital management (HCM) consultation that covers compliance, risk assessment and salary and compensation surveys. Other components are training and development and performance measurement. Justworks was founded in 2012 with a goal of providing small businesses with the same HR technology that their larger counterparts rely on. In their online reviews, Justworks customers note the value the service delivers, although some would like more reporting options, including a dashboard with data visualizations.

Whether you’re running payroll domestically or internationally, you must ensure you’re operating in compliance with the employee’s payroll laws. Outsourcing can make tax filing, calculating payroll, and other payroll-related matters easier and more how to write a grant proposal for a small business efficient, whether you’re a small business owner or a payroll specialist at an enterprise company. To help keep up with your growing business, you might consider outsourcing payroll to shift some responsibilities off your plate, allowing you to spend time on other crucial business tasks. The available pool of talent extends beyond time zones and national boundaries, if only businesses can reach it. Deel’s EOR services bring the most capable job candidates from more than 150 countries to your virtual doorstep by providing a global HR infrastructure that handles compliance in all local jurisdictions.

Hiring a third-party service provider means you’ll need to share your workers’ information. Before you hire a payroll provider, make sure to have a proper DPA in place, if necessary, to avoid potential legal issues in case the outsourcing service mishandles the payroll data. Handing some or all of your payroll functions over to a third party can help streamline payroll processes, reduce the risk of non-compliance, and ensure correct tax payments and pay stubs. The cost of outsourcing payroll can depend on several factors, including your business’s payroll schedule, the size of your business, and your exact payroll needs. If you decide to help streamline your payroll process using payroll software, you can spend as little as $22.50 per month. If outsourcing payroll seems like the best next step for your small business, consider using payroll software.

Best for Full HR and Payroll Service

Processing payroll and maintaining compliance standards is difficult for overwhelmed payroll departments, especially if their organization is growing quickly. The Forbes Advisor Small Business team is committed to providing unbiased rankings and information with full editorial independence. We use product data, strategic methodologies and expert insights to inform all of our content to guide you in making the best decisions for your business journey. To further evaluate your payroll needs, answer these ten questions about your business and its payroll system. If payroll isn’t automated, you have to run it manually on schedule a couple of days before payday, entering worker pay amounts and scheduling paydays.

If it does offer other services as well, these are likely to be in similar areas. In the early days of strategic outsourcing, companies were most comfortable hiring away low-skill tasks distant from sensitive business areas. Nowadays, many companies do the opposite and outsource critical functions such as customer service and money-management tasks. This has grown to include best accounting software for ebay sellers many activities normally performed by administrators or human resources departments—including payroll duties. Typically, outsourcing payroll services costs less than creating an in-house payroll department. We also evaluated each PEO service on its own merits, taking into account factors such as payroll services, employee benefits, HR management features and compliance assistance.