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Should You Outsource Your Payroll Processing?

October 4, 2025 Kevin Kenealy Outsourcing Payroll, Outsourcing Payroll Processing Comments Off on Should You Outsource Your Payroll Processing? ,
Should You Outsource Your Payroll Processing?

Companies have obligations and must file things to employees. Payroll issues are complex for today’s high-tech business world. A company’s payroll department has many moving parts of employees’ pay. This includes the payroll processing, direct deposits into employees’ bank accounts, FICA, FICO, State Income tax payments to government agencies including the State and the Federal Government, reporting requirements, time and attendance tracking, company payroll management reports, worker’s compensation, 401k’s as well as other retirement account reporting, unemployment claims, vacation time-off and more. This is an enormous amount of detail to keep track of for a small company while also running a business. The more time a business owner spends on these items the less time is spent on building and managing the current business.

How Much Time Should be Spent on Payroll?

The logical answer to this question is for the business owner to calculate the time spent working on payroll each week, every other week or month and then multiply it out for 52 weeks, 26 weeks or 12 months. When all the totals for each time segment are calculated, then the business owner has to look at the actual cost of working on payroll by comparing the time value to the amount of business not generated related to working on payroll and not managing and building the business. To make the comparison and analysis work and be valid each payroll task must be included in the evaluation, managing tax reporting, employee benefits, retirement funds to name just a few. Over the years, several studies in actual numbers have shown that business owners spend 3 full weeks each year dealing with federal tax issues. Add all the hours working on all the other payroll issues and tasks and it becomes glaringly clear that managing payroll is very expensive both in terms of time and in business growth perspective. There’s no magic number or empirical study out there that says when a business owner needs to hire a payroll processing company, rather than do it themselves. However, it’s simple to evaluate if an owner is spending 10 – 20 % of their time working on payroll and all its related issues it’s likely time to consider a payroll processing company to save time and money and then to put those savings back into managing and building business.

Answer the following questions to help determine if it’s time to hire an outside payroll processing company:

  • Is the time you spend on payroll is more than you like?
  • Is your business expanding, hiring more employees and now is payroll becoming a much larger task than before?
  • Are payroll mistakes becoming more expensive due to tax penalties for filing errors levied by the IRS?
  • Is payroll taking so much of your time that the necessary time needed to manage and grow your business is being sacrificed.

From a common sense point of view, if the answer to this group of questions is yes, it makes good financial sense to outsource payroll processing. The monthly expense of payroll processing fees, while not insignificant, is doable for most businesses. The advantage of outsourcing payroll processing is the time savings, cost savings realized with the reduction of penalties and fines and the better focus of time on and energy towards building and growing your business.


How Can I Tell It’s Time to Outsource Payroll for My Small Business?

April 2, 2025 Kevin Kenealy outsource payroll, Outsource Payroll Processing, Outsourcing Payroll Comments Off on How Can I Tell It’s Time to Outsource Payroll for My Small Business? ,
How Can I Tell It's Time to Outsource Payroll for My Small Business?

As the owner of a small business, you play so many roles—from visionary leaders to day-to-day operations managers.

Though this hands-on mentality is often essential, some areas of your business can get bogged down and time-consuming, such as payroll and HR.

Feeling buried under piles of paperwork and compliance headaches? You may want to think about outsourcing. Here are five strong indicators that outsourcing your payroll and HR functions might help your small business.

More Complex Environment for Compliance

It’s no small job to navigate the maze of federal, state and local labor laws. Things are constantly changing in the space, and keeping up with it can take a whole work life.

If you are having trouble being compliant, get audited often, or are subject to expensive penalties, this should be a warning that your current system is not functioning.

This ensures your business remains compliant so you can avoid non-compliance and the costly fines that accompany it by outsourcing payroll to a team of professionals trained in HR and payroll.

High Administrative Burden

Handling payroll and HR in-house can be a huge time sink. Each hour spent on this administrative work is an hour that wasn’t dedicated to core business activities fueling growth and profitability.

If you’re spending precious time and resources on payroll processing, benefits administration and handling employee relations, it’s a strong sign that outsourcing could help increase your efficiency and productivity substantially.

Growing Workforce

Growth is the indicator of a healthy business, but with an increasing number of employees, comes the increasing complexity of maintaining one.

With a growing team comes a growing list of payroll records to maintain, benefits to manage, and HR issues to deal with. If your internal resource is struggling to keep up with the rapid increase in the number of employees, then outsourcing is the way to go; offer the scalability involved in meeting these tasks adeptly and efficiently.

Frequent Errors in Payroll

Payroll errors aren’t just a pain point — they can also be expensive and negatively impact employee morale. Mistakes like wrong payments, delay in payments or tax filing errors can result in disgruntled employees and possibly even legal troubles. If your business can’t seem to get its payroll right, your system is not up to the task. Payroll service professionals guarantee accuracy and punctuality, and help you keep a trained and motivated workforce.

Limited Expertise

Small companies usually do not have the funds to bring on full-time HR and payroll specialists. It can result in oversights and inefficiencies if your team does not possess the key skills required to resolve complex HR-related queries—such as employee relations, benefits administration, or legal compliance. By outsourcing your HR functions to specialists, you will gain access to a vast amount of knowledge and experience to ensure that your functions are handled both effectively and professionally.

The Payroll Company Advantage

At The Payroll Company we understand that no two small businesses are the same; we all have our own unique challenges.

Our integrated HR and payroll solutions free you up from you entire HR process, save on administrative costs, and support the growth of your business in every way compliant with the appropriate regulations. This allows you to do what you do best run your business and serve your customers giving us time to focus on our specialties.

Final Thoughts

Taking payroll and HR functions from your small business and outsourcing it can be a game-changer.

After identifying these signs and taking some proactive steps, you can help improve efficiency, reduce risk and create a more productive work environment. Stop letting administrative hurdles stop you, rely on The Payroll Company and elevate your business.


Outsourcing Payroll is a Wise Business Strategy— Here’s Why

January 18, 2022 Kevin Kenealy Outsourcing Payroll Comments Off on Outsourcing Payroll is a Wise Business Strategy— Here’s Why
Outsourcing Payroll is a Wise Business Strategy Here Why by The Payroll Company 505-944-0105

In this article there will be a discussion about the reasons why small and mid-sized businesses choose to outsource payroll as a way to run their business. Quick recap: outsourcing payroll can be a more cost-effective choice and save your business time and money that can be put towards your efforts to grow as a company. Outsourcing payroll is a wise business strategy, and it’s more efficient. Making this decision may be a wise decision that will favor your business in several ways. When considering payroll outsourcing, look for reputable and committed to providing solutions for all your needs.

Payroll Outsourcing Providers

Payroll and HR outsourcing can be tricky things to handle. A professional employer organization (PEO), on the other hand, will take a portion or all the functions related to workers’ federal employment tax, withholdings, reporting, and payments. When looking for an outsourcing provider, choosing a PEO that also handles payroll, accounting services, and bookkeeping often makes sense. Besides, the PEO overlaps with the HR-related matters and responsibilities, and it allows your business to focus and manage the other vital affairs needed to make the company run. 

In-House vs. Payroll Outsourcing

Cost-effective: As mentioned earlier, payroll outsourcing provides many advantages. Signing up with a service is more cost-effective and gives you peace of mind that everything will be handled efficiently.

Compliance: Since payroll regulations are ever-changing, outsourcing can eliminate any potential fines resulting from human error. Moreover, new laws often target small business owners or sole proprietors, so you don’t want to take any risks. You shouldn’t have to worry about fines or compliance issues with a payroll outsourcing provider.

Security: Your business’ payroll has many processes involved, and Data or security breaches can occur when freelance writers don’t have updated software systems. Payroll outsourcing companies will provide your business with the latest technology systems to protect data and other information. They come up with the latest technologies and ensure the security of your data and information.

When Should Your Business Consider Outsourcing Payroll?

When should you consider outsourcing payroll services? When you struggle to submit payroll documents or stay compliant with regulations, it could mean it’s time to outsource. Here are a few ways to consider outsourcing payroll services:

  • Cost – The first thing you should know before deciding is to calculate the cost difference between the two scenarios and decide accordingly based on cost-effectiveness.
  • Technology – make comparisons among the software and other assets with service providers. Most of the companies have efficient and more reliable resources in such terms.
  • Reputation – A reputable workplace like all the companies that rely on us needs to have a clean compliance record, satisfied employees, and good security in place. It is highly important to do business with a service provider that will assist you in keeping your stellar reputation

If you are struggling to complete all your payroll-related tasks or your business is growing and you want some help handling payroll tasks. It might be time to consider the option of a payroll outsourcing provider. That being stated, complete the Free Quote form on The Payroll Company’s website to find out your options.


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