Outsourced Payroll: What are the costs and frequently asked questions

 In Outsourcing, Payroll, Small Business

Looking after your company payroll can be very challenging. So much so, that you may be looking to an outsourced payroll provider to take this headache away and bring some much needed external support to the table.

In this blog, we’ll cover some of the questions we frequently hear from prospective clients regarding outsourced payroll services. Furthermore, we’ll cover the fees you can expect to pay when outsourcing payroll to help you make an informed decision.

What is your experience of managing payroll?

This is always a good question to ask and possibly the first question you’ll ask if you’re thinking about outsourcing payroll. There’s so many variables to payroll with things such as salaried staff, contracted staff, zero hour contracts, maternity pay, bonuses and much more taken into consideration. Not to mention that businesses across a variety of sectors will operate differently and have their own unique requirements. We process payroll for businesses across manufacturing, retail, design and marketing and property sectors. Partnering with a payroll provider who has experienced and witnessed all the nuances that can come with processing payroll should be hugely reassuring.

When is the best time to set up payroll and switch to a new provider?

As we’ve discussed previously in our blog, ‘3 Reasons why April is the time to outsource your payroll’, April is the ideal time because it is at the start of the new tax year. The risk to switch payroll provider at this time is low because there are fewer bits of information to move and you don’t need to include your existing supplier. However, you might not have the luxury of waiting until the start of the new tax year to partner with a new outsourced payroll provider. Don’t sweat it. Making the switch can easily be done at any point throughout the year if you have solid payroll software in place.

How long does it take to set up a PAYE scheme?

Setting up a scheme can be put together pretty quickly. HMRC usually takes less than a week to approve schemes.

Can your payroll system handle all necessary employee records?

Asking this question avoids any issues further down the line. Our payroll software can handle everything to do with a particular employee. Items that are a must for any business are:

  • new employment documentation
  • full employee details
  • bank account details
  • salary details for all staff
  • tax codes
  • benefits, healthcare and bonuses
  • sick days and holidays
  • maternity and paternity leave
  • pensions and Auto Enrolment

What is the cost of outsourcing payroll?

We charge a £75.00 set up fee to get a PAYE scheme registered. However, it’s not unusual for a business to set up the scheme themselves and miss paying this fee altogether. Unfortunately there’s no default answer – the cost to process payroll varies depending on your requirements. As with anything, the more detailed the requirements, the greater the cost. For a small design agency with seven employees we look after, we charge £35.00 per month.

Is reporting included in your payroll service? Or is there a cost?

Some payroll providers charge for reporting, our service is inclusive of all necessary reports.

Why should I pay to outsource payroll when I could just do it myself?

Around 5 years ago it was possible for almost anyone to process payroll without making mistakes. However, in recent years it has certainly become a more specialist service now that there are so many things to consider. All employers are now required by law to submit a RTI (real time information) return every time employees are paid as part of payroll arrangements, with heavy fines if this is not done correctly.

You may have the time to carry out payroll yourself. However, the risks to a business in doing so outweigh the money saved managing payroll in-house.

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