Question

what are the advantages and disadvantages of outsourcing the payroll of a company to a payroll service in both cases if the company small or big ?

Answer 1

Advantages of outsourcing payroll

Attending to payroll demands a great deal of time and expertise. Outsourcing your payroll to a specialist can help:

free up precious time to focus on your core business

reduce the need for training in-house payroll staff

remove the expense of buying and maintaining a costly payroll system

minimise the chance for errors, omissions or late payroll tax filings

stay compliant with your tax obligations and PAYE responsibilities

As with all outsourcing, you should balance the advantages against the potential pitfalls - in this case the financial costs and the risk of communication errors, particularly for complex payrolls.

Whether payroll outsourcing will be cost-effective for your business depends on the complexity of your payroll requirements.

Disadvantages of outsourcing payroll

Costs of outsourcing payroll can be high, especially for a young business. There is a certain degree of risk if communication lapses - for example, if you don't advise the payroll specialist of a staff member starting or leaving.

Outsourcing will also mean losing control of some of the key elements of your business, eg:

you may not have instant access to payroll if it has been outsourced

you won't always be able to check it when you want to, or add anything that's missing

you will have to hand over confidential and sensitive staff information