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10 Reasons You Should Consider Outsourcing Your Startup Payroll Duties



by Erin Steiner


Here’s the thing about hiring employees: Eventually they are all going to want to be paid. This means that you need to decide (preferably before you hire anybody) whether you are going to do your payroll in-house or whether you are going to outsource it.


Here are ten reasons that outsourcing payroll is in your best interest:


1. Frees Up Your Schedule

Payroll takes a ton of time to complete. It’s more than simply adding up time written on a time card and cutting a check. There are lots of details to track and file. It’s easy to lose an entire day (or more) to payroll processing, and if you process payroll every week, that can seriously reduce your productivity.



It’s cliché, but true: Time really is money in the world of small business.



2. Cheaper

Hiring a payroll company is almost always cheaper than hiring someone to come into the office and process your payroll – even if that person only works part-time (which just adds another employee whose payroll must be processed).


3. Keeps the IRS Off Your Back

Payroll taxes are a complicated beast. Figuring out how to do them and ensuring that you do them properly is stressful (as are the penalties involved in doing them wrong). Outsourcing puts the responsibility for those onto the shoulders of someone else – someone with enough experience that they don’t make mistakes anymore.


4. Ability to Offer Direct Deposit

Most employees want direct deposit. It saves them time and effort. Setting yourself up for direct deposit is a complicated process. Most payroll companies, however, are already set up with ADP, which means that you won’t have to pay a bunch of money to offer this service to your employees.


5. Technology Issues (Tax Table Issues)

You know how annoying it is when, every day, about half of your phone apps need to be updated to continue working properly? The same thing is true for payroll software. There are constant updates and if you don’t keep on top of them, you could accidentally offer payroll using old and invalid tax tables, which – to put it very simply – would be really bad.


6. Privacy

If you hire someone to do your payroll in-house, that means that you are trusting that person with a ton of private business and personal information (yours as well as your employees’). Are you comfortable with that – especially if that person only works for you for a short time before moving on to something else?



Yep, it feels gross whether it’s business or personal gossip that gets spread!



7. Taxes for Employees

Most payroll companies will also take care of things like tax withholding and W-2s for a small additional fee. This takes the burden of ensuring that these things are done correctly and on time off of your shoulders.


8. Increased Accuracy

Do you trust your computing skills? Do you trust your ability not to transpose numbers? When you do the payroll yourself, you are only as strong as the person processing it. Payroll companies have software and other programs in place to guarantee accuracy.


9. Insurance

If a payroll processor does make a mistake, they hold themselves liable for that mistake. This means that they take care of fines and fees levied by the IRS, etc. It’s a lovely “insurance policy” that can give you peace of mind.


10. Access to Experts

Payroll processing companies have experts working for them to ensure that they do what they do as well as it is able to be done. When you outsource your own payroll to one of these companies, you have access to that expertise and experience. Who wouldn’t want that?


These are the biggest and most common reasons to outsource your payroll duties. Can you think of any others that we might have missed?


Erin Steiner is a full-time writer and content producer from Portland who has never, ever put a bird on it. She covers a variety of topics ranging from small business to entertainment.




Photo Credits

Erin Steiner | Stuart Miles |

Author : Guest Writer

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