Saving money is often the initial driver for payroll outsourcing but how can you assess whether it will save your organisation money?
And what about the financial impact of other benefits of outsourcing?
What costs should you consider?
Outsourcing can initially seem a high cost option compared to an in-house system, but when comparing the costs it is important to consider all the costs associated with running a payroll.
The cost of staff
Members of staff are your most obvious cost. It is very convenient to have an in-house payroll person, they are there to answer questions and may have other responsibilities. But payroll staff, like all staff, have holidays, have time of sick, may have long periods of absence due to illness or maternity, require training and, ultimately, they may leave. This is all a cost for your business, the cost of paying someone who isn’t working in the business, the cost of bringing in someone to cover for them if longer term or the cost of recruiting and training their replacement.
With a team of experts on hand at all times you can have access to payroll expertise when you need it, without the variable costs associated with payroll employees.
The cost of the technical stuff
In addition to staff costs is the cost of software and hardware necessary to run your payroll. You will need to upgrade and pay maintenance on your payroll software. You will also need IT support which either ads a burden to your own in-house IT department or will be an additional It outsource charge.
The other problem with these costs is that they can require capital investment whereas outsourcing your payroll, apart from any set up costs, will be rolled into a monthly charge, allowing you to budget and avoid any nasty surprises.
The cost of non compliance
With increasingly complex compliance, and HMRC investigating around 50,000 businesses a year, the cost for your business on non-compliance on your payroll can be harsh. Ignorance is not a valid excuse and if you make a late payment or forget to send off a particular return and you will be penalised.
You also need to consider the cost of keeping up with legislation.
As part of our service we will ensure your payroll is fully compliant and because this is what we do, we are fully up to date with the regular changes and complexities surrounding all types of payroll such as education.
To help calculate the true cost of running your in-house payroll, complete our online cost calculator now.