A Deloitte payroll survey found that 73% of organizations outsource some aspect of payroll, highlighting the growing reliance on external providers to ensure accuracy and compliance. Small businesses may prefer a simpler, cost-effective solution, while larger businesses require more comprehensive services. The services include GP Analytics, a powerful tool for tracking and visualizing payroll data from across the world. Based on the evaluation of companies on these range of criteria, we have created the ultimate list for the best payroll services that can be outsourced in 2025. A PwC study shows that companies that outsource payroll functions experience cost savings of that magnitude on average.
Human Resources
PayrollOrg found that when a company works with more payroll vendors, there’s a higher chance for errors to occur. Some companies work with multiple payroll vendors. In addition to payroll being more efficient and accurate, it can cut costs significantly, yet those are not the only advantages. Additionally, 77% of HR leaders who outsource HR functions say that payroll is more accurate and efficient.
Best Outsourced Payroll Services Companies in 2025
By outsourcing, companies eliminate the need to invest in expensive software and payroll staff. The main appeal of outsourcing payroll is the ability to access specialized knowledge without having to maintain a dedicated in-house team. This includes calculating employee wages, deductions, bonuses, and ensuring compliance with tax regulations.
Outsourced Payroll Functions
Even if the effects of underapplied overhead these errors are caught before they are submitted, they can still result in numerous hours of reprocessing employee paychecks and tax returns. Generally, business owners are not experts in government tax regulations. For employers, payroll errors can result in fines and penalties for improperly calculated tax obligations.
Regardless of who’s assigned to the process, they probably won’t build and complete payroll from the ground up. Let’s explore what it entails and how it gives businesses like yours an edge. Outsourcing payroll, however, helps organizations ensure their compensation is accurate and compliant without drowning HR.
Once a business becomes dependent on a specific payroll provider, switching providers can be a difficult and time-consuming process. Issues such as incorrect tax filings, missed payments, or payroll miscalculations can still happen, especially if the provider is handling payroll for numerous businesses simultaneously. Additionally, some payroll providers may not offer 24/7 support or immediate assistance during peak periods like tax season, which can cause delays in addressing critical payroll issues. Payroll providers often give businesses the ability to schedule payroll in advance, allowing for more precise financial planning. By outsourcing, businesses can ensure that their payroll system remains adaptable to changes in company size or structure. Professional payroll providers have dedicated teams that monitor legal changes and adjust their processes accordingly, ensuring that businesses are always compliant.
Ensuring that the payroll outsourcing provider offers robust and accessible customer support will also give you additional confidence in your choice and help mitigate any issues should they arise. It offers comprehensive administrative tools and online payroll services, including employee portals and tax filing. These companies offer comprehensive services and have teams of experts to handle various payroll functions. To make the process easier for you, this article will explore the best companies providing outsourced payroll services in 2025. Businesses are increasingly choosing to outsource payroll services to maximize the efficiency of this function and ensure compliance with relevant laws and tax obligations. There are many payroll outsourcing solutions designed specifically for businesses of all what is a fixed expense sizes.
Hiring offshore teams allows businesses to reduce costs while maintaining high-quality payroll and accounting expertise. Processes payroll, ensures tax compliance, and manages employee compensation. For businesses that require full finance and accounting support, outsourcing a dedicated team is a cost-effective alternative to in-house hiring. By outsourcing payroll, companies gain access to this expertise without needing to hire and train in-house payroll professionals. A 2022 Ernst & Young study found that a single payroll error costs businesses an average of $291 to correct.
Need an Alternative to Korn Ferry? Here Are 5 Great Staffing and Recruiting Companies for Remote Hiring
Following best practices when outsourcing your payroll is critical to ensure a smooth transition and ongoing success. Oyster is a global payroll provider with worldwide coverage boasting over 99% accuracy. While other companies handle your payroll for you, Near takes a different approach.
Take the time to make sure a provider is both trustworthy and experienced to minimize these inherent risks of outsourcing. While many cloud-based programs for payroll data management use encrypted servers and firewalls for security, they are juicy targets for malicious activity. A company’s core business functions—whatever it does to generate revenue—are understandably its main priority. “Leaving it to the pros” can be especially beneficial for large companies with complex and burdensome payroll responsibilities. One advantage of splitting up the responsibilities is that companies can get “hands-on” in specific areas they’d rather not entrust to a third party, all while still enjoying some of the cost advantages of outsourcing. Nowadays, many companies do the opposite and outsource critical functions such as customer service and money-management tasks.
Naturally, the quality of payroll outsourcing will vary, but it’s clear many companies still see these third-party payroll managers as more effective than internal capabilities. For most companies, performing payroll functions in-house amounts to nothing more than an important housekeeping duty; the company itself is expert in something entirely different. A New York- or San Francisco-based company that keeps payroll in-house, for example, must pay “big city salaries” to attract the right employees for managing payroll, just like the rest of its internal workforce. As with performing payroll functions in-house, applicable taxes must be withheld by the provider before payments are made.
Payroll providers are well-versed in tax codes, employee benefit programs, and other payroll-related regulations. Payroll outsourcing companies can quickly scale their services to accommodate changing payroll requirements, ensuring that business owners are never overwhelmed by payroll processing demands. Instead, they pay a fixed fee to the payroll provider for the services rendered, which often includes comprehensive payroll processing, tax filing, compliance management, and other related services. A payroll service provider is responsible for administering employee benefits, processing paychecks, and submitting necessary payroll tax filings to federal, state, and local authorities.
Decreased Data Security
Many payroll service providers also offer features like direct deposit, new hire reporting, time-off tracking, and employee self-service portals. In this guide, we’ll explain what to look for in a payroll outsourcing company, how to make the most of the partnership, and how six leading providers compare. By outsourcing payroll, you’re entrusting a third party with the data that matters most to employees.
Reduced Risk of Errors
Errors can result in overpayments, underpayments, or incorrect tax filings, which could lead to penalties or upset employees. Most businesses start off administering their own payroll. We’ll also offer additional insights into outsourcing payroll tasks.
- While different companies will have different criteria for evaluating a good match, they all must ensure a provider maintains adequate protections for employee data and complies with relevant regulations.
- A partner with Alight, NGA Human Resources, OneSource, everBe, and HR Path, Workday offers flexible payroll outsourcing services, payroll administration services, and tax and garnishment administration.
- Both legislative complexity and compliance monitoring is increasing.
- In addition, these records must be securely maintained for tax and reporting purposes.
- For most companies, performing payroll functions in-house amounts to nothing more than an important housekeeping duty; the company itself is expert in something entirely different.
Common Time-Consuming Payroll Responsibilities
Once information has been exchanged and procedures established, the payroll outsourcing provider begins its actual duties. While different companies will have different criteria for evaluating a good match, they all must ensure a provider maintains adequate protections for employee data and complies with relevant regulations. Preparing to hire away payroll functions represents the majority of a company’s actual work in the outsourcing process. In the modern business context, however, payroll most often refers to the process of paying employees or to the entities responsible for carrying this out. The term “payroll” can describe both a company’s list of employees to be paid and also the total amount an employer owes in wages and salaries. The process begins with the integration of employees into a payroll system and extends through end-of-year tax responsibilities.
QuickBooks’s payroll services include a suite of features, like healthcare packages, 401(k) plans, workers’ comp, and HR advisor services. It is a payroll partner with SAP and Workday that provides CPS, MPS, and BPO services. HR Path has locations across 22 countries to help businesses with payroll, consulting, solution implementation, and more. The decision to outsource to a payroll company or an independent contractor depends on several factors, including the size of your business, the complexity of your payroll needs, and your budget.
- Learn how Playroll helped companies grow their teams.
- Payroll involves sensitive employee information, such as personal data, wages, and tax filings.
- For many business owners, this loss of control can be unsettling, as they no longer have complete oversight of the calculations, distributions, or accuracy of payroll tasks.
- The best payroll outsourcing companies offer more than just paycheck processing — they deliver reliable support, compliance expertise, and tools that grow with your business.
- This means that payroll costs are flexible in line with business volumes.
- As a nearshore hiring company, Near presents a simple, fast, and comprehensive solution.
Payroll Expertise
Above all, we are dedicated to providing personalized customer service, for businesses of all debt service calculation sizes. A solution that takes months to adopt can significantly impact your business – look for providers that offer quick and simple onboarding. With so many outsourced payroll solutions available, how do you choose?