Outsourcing Payroll And How It Works

solveHR Category: HR, Payroll No Comments



Dealing with payroll can frustrate and fluster even the most experienced payroll experts especially if they have other responsibilities.  Missing tax filing just once can result in a penalty being imposed on the company. 
Outsourcing payroll can be an attractive and feasible option for many businesses compared to in-house processing. Making the right choice could provide the perfect and cost-effective way to take care of employee salaries, taxes etc.

Some common reasons companies choose in-house payroll are:

  • They think it is cheaper than outsourcing payroll
  • They think outsourcing will lead to leakage of wage information
  • They want to be able to make changes in the payroll at the last minute

Outsourcing the Payroll

What happens when a company, such as yours outsources payroll?  Let us start with the requirements of electronic payroll submission.  Frequently, larger businesses with more employees require more time to complete payroll.  This is due to the already time-consuming process called, the Real Time Information Payroll (RTI) system.

Despite software that can help you manage your company’s payroll, you will have to start by providing your data input, which means utilizing valuable time.  By outsourcing this time-consuming operation, you can redirect your focus on other pressing responsibilities. The outsourcing company will be managing this process.

Get the required information in one place and send it over to the company you hired.  It should include the following data:

  • Employee date of birth
  • Employee NI number
  • Current HMRC codes

Next, you will have to collect data on the hours worked, which will vary with each company.

Many companies will prefer to collect this data via email while other companies will enter it into an electronic system. Either way, once you have provided the information, it will be processed accordingly.

Regarding the hours worked, you will need to provide the accounting firm with the following details about your employees:

  • Information about SMP and SSP
  • Nature of pay (i.e. whether it is paid at the end of every week or on a monthly basis and if it is flexible or fixed)
  • The amount paid by the hour
  • Sick days, so the amount might be deducted
  • Holiday pay deductions
  • Deduction of any expenses

The HR firm will then process the information that you provide either weekly or monthly, depending on the needs of your business.  You might also be given an annual tax return filing along with the information mentioned above.

If you think outsourcing your payroll will make matters easier for your business, we couldn’t agree more.  

It is best to retain a responsible HR firm or PEO (Professional Employee Outsourcing) firm to handle this responsibility.  

pinnaclesolveshr is the viable alternative that will manage payroll as well as payroll tax withholding and tax reporting.  


Contact us to learm more (click image below).pinnaclesolveshr-contact-us

Topics: HR, Payroll

Recent Posts