The Business Benefits of Outsourcing Payroll

Outsourcing Payroll

Payroll management is a standard part of any business with employees, whether they are part of a large or small company. Often, it is managed in-house and an internal manager or team will oversee the regular finances of payroll. However, in recent years, there has been a jump in the popularity of outsourcing payroll within the UK. 

There are many reasons why a business might consider shifting their payroll to an external company, most often, perhaps, due to their own growth. However, regardless of a business’ size, outsourcing payroll brings about huge benefits.


Internal finances, especially employee paychecks and invoices from contractors, are incredibly important and under constant observation from both employees, who want to ensure timely and correct payment, and HMRC, who want to ensure compliance. Not only do potential mistakes cause frustration but they potentially lead to fines or greater penalties brought against your business. Each year, millions of pounds worth of charges are made against businesses around the UK by the government’s tax office. These fines often arise from errors made in a payroll department.

Avoiding these mistakes by outsourcing to expert payroll services will prevent your business from being surprised by the consequences of a payroll error. Payroll companies are also constantly kept up-to-date with the most recent changes in HMRC tax regulation, meaning that you’ll never be caught out by unexpected changes. It is likely that, following the government support during the coronavirus pandemic, tax law and investigation will become even more vigilant, meaning more businesses will be caught out.


Outsourcing your payroll is more cost-effective. The internal costs of dedicating employee time to managing payroll are, overall, less efficient than handing over the responsibility to experts who have both the tools and resources to manage your payroll efficiently and securely. 

Dedicated payroll companies are able to accomplish tasks more quickly than an in-house payroll employee and will often be able to work to a higher standard due to training and software. Payroll services will also alleviate you and your staff of large responsibility, allowing you to concentrate on improving your business in other ways.


Any arising issues within internal payroll management cause problems and, by proxy, dissatisfaction for employees. Payments are missed or taxed incorrectly, leading to unhappy staff and more time dedicated to a single task. Being familiar with the demands of employees regarding their payslips, external payroll companies can assure that your staff remain totally satisfied with their salaries and payments. 

Most payroll service companies now operate with a digital payslip system, allowing employees to access their payslip online at any time, where it is stored securely. Should any problems arise, employees will be directed to contact the payroll company who will resolve the issue.

Even if you remain confident about your business’ ability to manage payroll, there is likely to be some room for improvement. There is little reason not to arrange a consultation with a reputable external payroll company. They will likely be happy to evaluate your current arrangement, offering a complimentary discussion of how outsourcing your payroll might benefit your business specifically.


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