Payroll Outsourcing

Businesses may decide to outsource their payroll functions to an outsourcing service like a payroll bureau or a fully managed payroll service. These can normally reduce the costs involved in having payroll trained employees in-house as well as the costs of systems and software needed to process payroll. In the UK, payroll bureaux will deal with all HM Revenue & Customs enquiries and deal with employee's queries. Payroll bureaux also produce reports for the businesses' account department and payslips for the employees and can also make the payments to the employees if required.

Another reason many businesses outsource is because of the ever increasing complexity of payroll legislation. Annual changes in tax codes, PAYE and National Insurance bands as well as more and more statutory payments and deductions having to go through the payroll often mean there is a lot to keep abreast of in order to maintain compliance with the current legislation.

Many small businesses outsource payroll functions because calculating tax and NIC deductions can be time-consuming. Payroll can also be complicated by other payments and deductions such as maternity pay, pensions and student loan repayments.