Benefits of Payroll outsourcing services for business owners

According to a survey conducted by a payroll software provider, PayrollPro, 87% of businesses made payroll errors in 2022. The survey also revealed that 67% of businesses made errors in calculating employee salaries and wages.

Nearly 40% of the respondents stated that incorrect data entry was the primary cause of payroll errors. Other common errors included incorrect deductions, incorrect payment of benefits and allowances, and miscalculations in holiday pay.

The survey also found that payroll errors cost businesses an average of £500 per mistake, with 25% of respondents stating that they had to pay out over £1,000 to rectify errors.

The COVID-19 pandemic was cited as a contributing factor to the increase in payroll errors, with businesses struggling to keep up with changing legislation and furlough payments. The survey highlighted the importance of implementing robust payroll systems and procedures to avoid costly errors.

HR and payroll outsourcing companies are in high demand in the UK, especially in small businesses. Actually, 61% of British businesses outsourced their payroll in 2019, statistics from YouGov show.

Payroll outsourcing services are an option for businesses that don't have the resources or expertise to handle their own payroll. If you're considering using payroll outsourcing services, here are some benefits to consider:

1. Payroll is one of the most important aspects of a business because it's tied to employee compensation and tax payments. Outsourcing your payroll can help ensure compliance with regulations while saving time and money on administrative tasks.
2. Payroll outsourcing can help streamline processes, such as filling out tax forms and calculating overtime pay.
3. Payroll outsourcing can provide security against errors and omissions in payroll calculations which could result in costly mistakes or even penalties from HMRC for late filings or incorrect withholdings.
4. Payroll outsourcing can improve accuracy and compliance with regulations because experts are available to answer questions about changes in rules or laws as they occur rather than being left up to each individual business owner who may not be aware of these changes ahead of time.

To put it simply, payroll services help you:

1. Reduce your expenses: outsourced payroll usually takes £2 to £6 per employee.
2. Save time on payroll processing: in-house payroll-related tasks cost companies nearly six weeks — 235 hours — of productivity when compared to those who outsource.
3. Concentrate on growing your business: payroll services offer business owners peace of mind

The best payroll services offer the following features:

• Direct deposit payments
• Payroll tax filing and payment
• Employee self-service and self-onboarding
• Integration with QuickBooks or other accounting platform
• Basic reports
• Automatic compliance updates

According to Forbes, the best payroll services for small businesses are:

1. OnPay
2. Gusto
3. ADP Run (one of the largest payroll companies in the world)

To see more, check our selected list of payroll companies for SMBs 2023.