Payroll Outsourcing - How Exactly Does it Work?
- Deciding if you need to outsource payroll
- Define your needs
- Employee Data
- Issue and send payslips and P45’s
- Handle employee queries
- Liaise with inland revenue
Deciding if you need to outsource payroll
Your first step is deciding if your startup does or does not need to outsource payroll. The likelihood is that outsourcing will save your company very valuable time and money, freeing up your staff to be put to better use. You can do your own maths and weigh up the time an employee might spend on payroll, their training and any software or tech that needs to be purchased or updated, factoring in what their time could have been spent doing, against the cost of outsourcing your payroll. For startups and SME’s the answer is often a big yes.
Define your needs
There are a whole host of payroll services that can be provided to your startup, and when you decide to outsource and look in too all of your options, it’s a good idea to already have a handle on what you’re looking for. You may only need to outsource your payroll, or as a recruitment startup you may also require funding, credit checks, debt collection and more. By defining where you need assistance you can ensure you’re getting the correct products for you.
Employee data will need to be collected by or provided to your payroll service, things such as wages, hourly or daily rates, expense allowances, NI numbers etc. The employee may be given a portal or login of their own which allows them to access the service directly, this is again taking any burden away from management. In addition the service can collect timesheets and process these for you, your staff may well be able to upload these on their own portals, along with their expenses - hassle free for you.
Issue and send payslips and P45’s
Your payroll service will process all of your staff and employee payroll and send or issue payslips to them directly, no involvement required from yourself, completely taken care of by your outsourcing payroll service. Employees can input expenses and your payroll service can issue your P45’s too. As this is taken care of by an experienced organisation, your payroll will be processed accurately, on time and comply with all regulations that are required without any work from inside your startup.
Handle employee queries
Employee issues or queries can be easily dealt with directly through your payroll service, so changes to their details or questions about their tax need not go through you or your HR department, they can be outsourced for answering. Your payroll service will be well equipped to deal with tax queries and with the experience of their organisation, will likely have any employee issues resolved with ease and speed.
Liaise with Inland Revenue
Your payroll service can liaise directly with the Inland Revenue, again alleviating you of the dreaded task of fielding their enquires. This reduces risks that any taxes or figures might be filed late or incorrectly, as might happen when managed in-house.
If you missed part one of our three part guide, you can find it here.