There is a famous saying, “Death and paying taxes are inevitable.” Add one more to the list- paying and being in compliant payroll. Is disbursing payroll easy? There is an excellent reason that we have curated an entire blog on Best Payroll Outsourcing Service Providers. Do you still need convincing
Payroll outsourcing is becoming a standard outsourcing practice. Last financial year, 73% of organizations outsourced their payroll functions. But why do you need it?
Why Do You Need the Best Payroll Outsourcing Service Providers?
After the Pandemic, businesses are flourishing. The teams are growing, and more people want to invest in your vision. Logistically, it could be more fun. With a growing team, it is now necessary to pay your employees correctly and on time.
Reality check: managing payroll can be a real pain. It is where the services of the Best Payroll Outsourcing Service Providers come in handy!
The payroll outsourcing solutions take a lot of the work off your plate. In time, they are giving you the luxury of time to focus on your business. The payroll solution has revolutionized business handling and made it easier for all business sizes. They save time and resources while ensuring compliance with ever-changing tax and labour laws.
But you know, in this blog, we will not give you the top 8 list of Best Payroll Outsourcing Service Providers. We will also educate you on the intricacies of payroll solutions. It will help you focus on the bigger picture.
What are the working operations of the Best Payroll Outsourcing Service Providers?
In the early days, businesses outsourced their menial tasks to third parties. At the same time, they keep core operations in their job description. However, now the tables have turned in the opposite direction.
Companies now prefer outsourcing crucial tasks like HR, finance, and customer support (sometimes the entire departments) to outsourcing companies. It increases efficiency and better outputs. Now, payroll also has been added to the list.
It means now you can hire a team of payroll experts from other payroll outsourcing companies, and they will do all the work for you. It’s like getting an extra hand on the deck to get the payroll disbursal done. On top of that, they will be compliant with the local laws.
Yes, there is always the condition for being compliant and much more. Want to know more about these lines?
Functions of Best Payroll Outsourcing Service Providers
As we said, payroll is more than just distributing paychecks. It involves other different tasks, some of which are handled by other people and businesses. Well, let’s take a sneak peek.
Getting Employee Information:
The foremost job is to gather all relevant information about your employees, such as their names, addresses, and tax information.
Making Payments:
A system is set up so employees are paid automatically or with the money deposited directly in their bank accounts.
Tracking Hours:
If your employees work different hours, there should be a timesheet that can keep track. It helps in determining the wages.
Calculating Wages:
The timesheet is a figure that disperses out how much each employee earns based on the number of hours worked.
Dishing Out Pay Stubs:
There should be an honest and open talk on the breakthrough of CTCs. Like how much they’ve earned and what’s been taken from their paychecks, so you have to give them pay stubs.
Dealing with Wage Garnishments:
Sometimes, the employees are liable to court, and they order that a portion of their wages be removed to cover debts. It is the payroll’s job to remove that debt portion.
Handling Taxes:
Payroll outsourcing companies must deal with taxes, like health insurance and workers’ compensation claims. This part is complex.
Here’s how payroll outsourcing companies work:
The Best Payroll Outsourcing Service Providers SOP may include following steps:
- The setup period- payroll service providers gather all information as mentioned above. Also, in this period itself, you will need to confirm the rate and working hours of each employee. Make sure that every employee is accounted for in this period.
- During the pay period, the payroll provider needs to calculate the number of hours and feed that information into the software While calculating wages and salaries. It is the responsibility of the payroll provider to confirm the information and review it by the client.
- When the gross pay is calculated, the payroll service provider will make the pre-tax and post-tax deductions, if applicable. It can include taxes, child support, workers’ compensation, and employee benefits.
- When the net pay is calculated, your payroll service provider will make deposits or deliver checks to your workers on your behalf. On top of that, make other necessary payments, including taxes, during tax season.
- At the end of this, you will receive tax reports, thus helping you review the entire process.
The entire process of payroll calculation is the responsibility of payroll outsourcing companies. You need to provide the necessary employee details, and the experts take it from there. They calculate each employee’s pay accurately, even for those employees who have varying rates and hours, which also include freelancers.
Since tax matters are their responsibility, you can say goodbye to tax worries. On reimbursement day, they handle everything, from sending paychecks to direct deposits. They are experts in payroll regulations, ensuring your business stays on the legal track. Guess what? You will want to have a payroll dream team on your side.
In a nutshell, payroll outsourcing solutions can be an ally/ reliable partner who will handle payroll tasks you would not like to address.
Practices of Best Payroll Outsourcing Service Providers
We have outlined every function of payroll service providers. But, choosing the best payroll solutions to help your cause will need some research. So here goes the checklist for the Best Payroll Outsourcing Service Providers.
Understanding Your Business Needs:
The point is apt when starting the research. It would help if you were driven, clear, and precise when choosing the best payroll service provider before you head to the store.
On the above point, you should ask the following questions when shopping for a payroll service provider.
- What exactly are your expectations from a payroll outsourcing partner?
- Are you seeking professional help with payroll taxes, timekeeping, or something else?
- We have a clear idea of your needs. It will make it easier to find a partner who’s a perfect fit and can add value to your organization.
Checking Their Reputation:
Before committing your word, have a look at the testimonials. The testimonials give a slice of what their previous customers have to say. Read online reviews and ask the provider for references. These only help in arriving at informed decisions. Ask the questions below before committing.
- Do they have a clean reputation?
- Are they responsible and reliable enough?
Tech Expertise and Security:
Tech is evolving within weeks. First, there was manual calculation, then came a calculator, and after that, Excel. Currently, we have HRMS, which can excel in calculating payroll for every employee.
Think of it as buying a smartphone with the latest features.
Check that the payroll provider is synchronized with modern technology and industry standards. You will not like a smartphone that can’t run essential Whatsapp, and definitely, you don’t want a payroll partner with outdated systems. Plus, you lock your phone and specific apps with a password. Ensure they have robust security measures to protect your employees’ sensitive information.
Laws and Regulations:
These sensitive areas need to be addressed by a payroll outsourcing provider, which can become a problem for both the provider and the client company. If a company is outsourcing internationally, it shouldn’t assume employers’ regulations in the provider’s country. A company should also refrain from taking applicable taxes from the payroll process.
Always double-check the figures, as the consequences of an error can be costly and will fall entirely on the client company.
Pricing and Contract Details:
The contract terms should be reviewed at least three times. Answer the below questions before signing on the dotted line.
- Does it fit your annual budget?
- Are there any hidden fees like processing charges?
If something is feeling fishy, feel free to ask questions and negotiate. The pricing practice helps in making sure you will get the best deal.
Now, we have elaborated on the nitty-gritty of payroll outsourcing solutions. But now it’s time for a demo.
How does MME help SafetyWing’s Finance team save $9k annually?
SafetyWing is a health insurance company specifically for remote workers and teams.
Before partnering with MME, they faced many challenges paying workers across borders, as it had to be done manually without a centralized system. The internal processes took time, and they needed a network of expertise to navigate international compliance.
“What made MME stand out for SafetyWing was the extreme focus on the customer and how friendly and easy [it is] to use the platform. The best I have seen in this category,”
Head of Finance at SafetyWing.
Thanks to MME, the HR and Finance teams from SafetyWing have saved over 30 hours a month on admin and USD 10,000 yearly.
Okay, I understood the significant parts. However, I still want to know if I can conduct payroll in-house.
When should you keep payroll by in-house experts?
Well, it’s a no-brainer question that gets asked a lot. It is a critical question for CEOs and other decision-makers. Should you think of outsourcing payroll services? When do you know it’s the right thing for your business?
Consider the following:
- What is the employee’s strength?
- Do you have any foreign employees or contractors to disburse payroll?
- Do you have the liquid fund to purchase payroll or accounting software and its integrations?
- Can you provide the necessary training for current employees or hire new ones to manage payroll?
- Do your employees work alternate hours every week/month?
Generally, outsourcing payroll can be a time-saving and cost-effective solution if you:
- There are fluctuating working hours for several employees.
- You have the liquid fund to buy the payroll software, but the employee strength is small. Therefore, it is unjustified to purchase payroll software to use in-house.
- Often, they hire foreign contractors who complete the job for tax filing.
9 Best Payroll Outsourcing Service Providers
Running a business is like juggling a hundred things at once while doing cartwheels. Sometimes, it feels overwhelming; it feels like you are doing it all alone. But what if we told you that the best payroll outsourcing service providers will not let you lift a pen? Not even the arduous payroll heavy lifting?
MME
You are presenting to you your first Admin Superhero. It is a perfect sidekick, support team, and go-to crew. You have a team of experts who know the ins and outs of your industry there to tackle any task you throw their way. Whether you need help offsite or onsite, MME will be there for you.
The payroll team at MME handles all the payroll and contractual stuff, so you only pay for the actual hours our virtual assistants work. It’s like getting a tailor-made payment plan. It ensures you’re billed only for the work, saving you time and money. Now, Say Goodbye to the Contractual and Payroll Chaos.
Though, MME is not one-size-fits-all. But after a few meetings, we get to know your business inside and out and figure out precisely what you need. We are flexible that way. We evolve with your business. Are our virtual assistants budget-friendly? They can handle it.
Right from sifting dara to in-depth research while keeping your finances in check- no need to break the bank before enrolling in MME’S service. Another nice thing about our assistants is that they don’t limit themselves to one zone. They strive to increase their knowledge.
Also, MME provides them with training, helping the assistants to remain sharp and updated. MME is a full-service payroll company that has broad experience with running payroll and ensuring tax compliance for businesses. MME can take on the responsibility of navigating unfamiliar payroll laws and best practices for you.
Features
- Only the best candidates, 0.1% of applicants, cut virtual assistants. They are well versed with 200 skills and have mastered over 70 no-code tools.
- Sometimes, the assigned assistants are off duty due to personal reasons. No worries, they have already got a replacement ready to jump in.
- The clients can select their experts. They offer both offshore and US-based virtual assistants. Do choose what suits your needs.
- They have an excellent program where you can test the waters to see if it is a match made in heaven. They offer a trial period of 7 days.
- The security system is commendable. The virtual assistants sign NDAs to ensure your business’s private information stays private, thus being a robust system.
- Our team can be accessed from anywhere—one of the reasons why our network has reached 150 countries.
- More reliable support 24/7 with a dedicated account manager for every team
- Manual work has 11+ automation with auto payments and invoicing and on-platform contract amendments.
- More control and flexibility with advanced payroll funding options.
- With off-cycle payments, 8+ contract withdrawal options.
Do you need clarification on global payroll management and ever-changing laws? Stay compliant and pay your entire global workforce right from your MME platform.
Any Hire (Upwork)
Upwork streamlines the classification and payment process. Be it freelance or contractual work across various industries, Upwork allows you to focus on growth while handling administrative tasks for you.
Features:
- Classify workers based on Internal Revenue Service (IRS) and ACA guidelines.
- Handle ACA enrollment and administration for employees.
- Provide workers with payroll tax and W-2 reporting.
Pros:
- Simplifies the process of managing freelancers and W-2 employees across various industries worldwide.
- Reduces administrative burden and risks associated with benefits and classification.
- Ensures compliance with global tax and labour regulations
- Can reduce costs through proper budgeting when compared to traditional agencies.
Con:
The only drawback is that everyone has to pay Upwork’s commission fee.
Pricing:
The cost of hiring a worker through Upwork is less than that of a typical staffing agency. It’s 49$ / month for contractors and $199/ month with a 3% employee processing fee.
ADP
ADP is a payroll service provider that has a million companies as their client worldwide. They offer comprehensive payroll solutions and tax support backed by solid expertise. With that, they provide a range of packages designed for different business sizes and payroll needs.
Features:
- Fast and easy payroll processing, be it locally or globally.
- Employee and manager self-service through every medium.
- 24/7 support from certified payroll professionals
Pros:
- Highly rated, used, and recommended by millions of businesses
- Offers different packages tailored to different business sizes and needs
- Simple payroll integration with time tracking, HR systems, and enterprise resource planning (ERP) systems
Con:
Smaller businesses will only need some features in the service of the packages.
Pricing:
ADP’s pricing isn’t in the public domain. You will need to contact the company for the same.
Paychex
Paychex is one of the third-best payroll service providers that offers solutions for small businesses, midsize companies, and enterprises for any number of employees. The award-winning customer support and user-friendly platform help Paychex become the third most popular service.
Features:
- Online payroll processing in two clicks.
- Accurate calculation filing and payment of payroll taxes in a systematic manner.
- 200+ compliance experts who are updated with ever-changing laws and regulations.
- Multiple pay options, which include employee self-service and compliance support.
Pros:
- The business model is suitable for all sizes, from minor to enterprise.
- Customer support is available 24/7.
- Comprehensive tax services, which include Employee Retention Tax Credit (ERTC) eligibility check and claim service
- Integration with HR tasks and compliance address
Cons:
- Pricing may not be transparent, which requires a quote for exact costs.
- A testimonial outplayed that there has been a problematic onboarding process for new hires.
Pricing:
Paychex doesn’t provide specific pricing information. It quotes a fee based on the work that needs to be done while encouraging the clients to establish a quote.
Gusto
A full-service payroll platform that simplifies payroll management with a user-friendly interface and intelligent features to boast of. The interface is designed in a simple manner for all business sizes.
Features:
- Automatic tax filings.
- Real-time tracking of benefits and time.
- Unlimited payrolls with transparent prices and no hidden costs.
Pros:
The Gusto platform is suitable for all business sizes. It has integration with popular accounting and time-tracking software. The best part is zero mistakes with automatic calculation. The company has a network of contractors in 120 countries. The company encourages Employee self-setup and access to pay stubs and W-2s
Cons:
One user reported that there needs to be more flexibility with pay periods. They need to be able to set the dates of the pay period to stay in compliance with state regulations. The testimonial also elaborated that customer service is slow and only sometimes helpful.
Pricing:
The Gusto payroll system has transparent pricing plans and makes processing payroll easy. Gusto’s pricing plans start at $40 monthly, with higher rates for add-on features. The number will increase when all the employees are added up, which will be $6/ employee.
Intuit QuickBooks Payroll
Intuit QuickBooks Payroll is a comprehensive payroll service integrated with the widely used QuickBooks accounting software. The software offers automatic tax calculations, filing, payment, HR support, and employee benefits, making it a versatile solution for small business owners and beyond.
Features:
- Tax penalty protection, which can go up to $25,000
- Same-day direct deposit of taxes and payroll.
- Real-time tracking and timesheet approval.
- The software is well-integrated with employee benefits and services.
Pros:
- Customer address regarding comprehensive payroll, tax, and HR support 24/7.
- Automatic taxes and form calculation, which includes filing and payment.
- Automated processing saves time and effort.
- Competitive employee benefits at par with market standards on a small business budget.
- Error-free tax calculation.
Cons:
- Limited customization options and limitations on features in the single package. For example, time tracking only comes in some of the plans.
- Additional filing fees for employees in different states.
Pricing:
Pricing plans start at $37.50 per month, which excludes $5 per employee per month.
Deluxe
Deluxe payroll is an automated system that integrates well with your accounting software. It provides a comprehensive solution for managing payroll and HR tasks. The service also offers full-service payroll, tax filings, detailed reporting, and synchronization between HR, benefits, and payroll systems.
Features:
- Full-service payroll and tax filing for any state that doesn’t require additional fees.
- W-2 and 1099 filing
- W-4 and new hire filing
- No down payment on compensation solutions and garnishment payment services.
- Real-time automated time tracking and paycheck calculations
Pros:
- Automated payroll and HR tasks, which is saving time and resources.
- The service easily integrates with QuickBooks Online and QuickBooks Desktop
- Offers flexibility in employee payment options, which are direct deposit, pay cards, or checks.
- Customizable packages that suit various business needs.
Cons:
The testimonial emphasized the Limited accounting software integration options (currently supports QuickBooks Online and QuickBooks Desktop only). For more advanced features, you may require add-ons.
Pricing:
Packages start at $45 per month, which excludes $7 per employee per month.
TriNet
The service is a comprehensive payroll and HR services solution designed to streamline payroll administration, ensure compliance, and adapt to the changing needs of small and midsize businesses. It offers payroll processing, tax management, and integration with popular accounting systems.
Features:
- Payroll processing, which has direct deposit and debiting.
- Electronic w-2 preparation and its delivery.
- Self-service platform
- Federal, state, and local payroll tax calculation
Pros:
- User-friendly interface with a self-service platform.
- Compliance support for regulations and payroll tax queries.
Con:
The platform is slower to understand the client’s requirements than other modern HR systems.
Pricing: the price is not available on the official website, but it can be generated when a client requests a quote.
Key Takeaways
Outsourcing payroll operations is a good idea, and it is a logistic way to handle your business’s payroll and HR needs. Each payroll solution listed above has a distinct feature to offer you. , However, it’s a win-win situation for a small business that ultimately wants to do away with handling payroll and other employee-related costs – it’s time you hire a virtual assistant.
An international team on board increases innovation, creativity, and diversity; on the other hand, it also complicates payroll management. Now, as your team grows, so do your payroll operations, which include taxation.
It would be best if you navigated different currencies, exchange rates, bank laws, and compliance requirements. And as your team grows, so do your payroll needs.
“We’re bridging the global aspect of hiring and the payroll aspect of hiring in one full-stack HR platform… All of your employees are in one database, we can run payroll, and we can hire anyone, anywhere, as a contractor or full-time employee where we have our entities.”
Co-founder and CEO, MME
With MME’s Global Payroll solution, all that work and worry is taken off your plate. Running payroll around the world from one platform will streamline international operations. The aftermath will eliminate the ongoing admin of local compliance, taxes, benefits, and more.