Should you outsource payroll for your small business?

When operating a small business, there are countless tasks that need to be handled in order to run a workforce effectively. Every employee has certain expectations with respect to wages, benefits, and other forms of support, and there are many logistical hurdles and pieces of paperwork that come along with them.

Even simple tasks, like processing payroll, can put a strain on a small business’ time, money, and manpower. Outsourcing in-house jobs such as payroll can help organizations remove distractions and shift focus to more strategic activities.

What is outsourced payroll?

When you outsource payroll for your small business, professionally trained experts will take care of the payroll process from start to finish so you can get time back in your busy work day. After you've set up your payroll, these experts function as an extension of your business and take care of your payroll processing and reporting including the calculation of tax deductions, meeting government remittance deadlines, preparing your payroll for year-end, and handling pay-related employee inquiries. From the employer’s end, you’ll need to ensure that accurate employee information and hours worked are submitted. Prior to processing, you'll also have an opportunity to review your payroll expense for the pay period and see the reports that give you the right amount of insight into your labour spend. 

Why should you outsource payroll?

For many small businesses, outsourcing payroll can be extremely beneficial. End-to-end outsourced payroll services can help your business save time, reduce compliance risk, and ensure your employees are paid accurately and on time so you can focus on driving your business forward.

The decision to outsource payroll or keep it in-house is different for every small business. To make the right decision for your company, we’ve put together a checklist of questions to consider as you're weighing your payroll outsourcing options.

1. Does keeping up with compliance stress you out?

Compliance is a critical issue for businesses of all sizes – and particularly for small businesses, it’s tough to keep up with constantly changing legislation, and then shift your strategy accordingly to abide by new requirements. And as your business grows, payroll can become even more complex.

Outsourcing payroll to a trusted partner means that someone else will help you keep up woth the annual gross to net tax rate changes. You can also operate with greater certainty that pay cycles will be processed more accurately and on time. In addition, staff members will be on hand to answer any payroll-related inquiries that employees might have at any step along the way.

2. Can you be more efficient with your time?

Adding a new employee to payroll can be extremely time consuming; you need to enter all the information required by CRA and/or RQ, reenter it in multiple locations, set up various forms, and figure out what to pay each person. Small businesses move at an unrelenting pace and adding all of this onto your plate can take away from focusing on key business priorities.

Processing payroll for your small business should be a basic part of HR operations, not a massive undertaking that drags your company down. Ideally, you'd be able to have each employee paid each pay period without any interruptions in other projects or business initiatives.

If that ideal isn't working out for your business, it might be time to make a change. You should have all the time you need to invest your skills and talents fully into achieving your strategic goals. If payroll processing is getting in the way, now might be the right time to reach out to a payroll services company.

3. Are you buried under piles of payroll paperwork?

Forget about the amount of paper on your desk and the number of spreadsheets on your desktop. One benefit of outsourcing payroll is that you can go paperless – or at least significantly reduce the amount of paper you have to slog through to make sense of payroll.

In addition to having less impact on the environment, outsourcing and going digital also means fewer misplaced or misfiled documents. Instead of a time-consuming manual process during every pay cycle, you can bask in the benefits of automation and cut down on time spent correcting errors and finding missing documents.

Related: Seven things to look for when choosing a payroll partner

If outsourcing payroll is right for your small business, the next step is to look for a trusted payroll partner to help reduce your administrative burdens. Experienced and trusted payroll specialists can help you administer your payroll from start to finish. Learn more about Powerpay Managed Payroll services and get back to focusing on the growth of your company.

Learn more about the benefits of having experts manage your small biz payroll