Starting to take on staff is usually a sign that your business is growing (Hooray!) – but having negotiated through the new recruitment and HR aspects of employing someone, you then have to run the payroll and pay them. Easier said than done when you have never done it before!
Payroll is the process of managing employees’ salaries, wages, bonuses, sick pay, pensions and maternity/paternity pay. An employer also has to provide each paid employee with a payslip stating:
- Gross Pay - Amounts of fixed deductions - Amounts of variable deductions - Net Pay - How it has been paid
Payroll rules change frequently, so it is important all employers keep their knowledge updated, as there are fines if you make mistakes or miss deadlines.
Due to the importance of getting this process right for both employer and employee, many small businesses outsource their payroll.
So, what are the benefits of outsourcing?
A big benefit if you are a small business, is that you don’t need to employ a dedicated member of staff to do it – which saves on employee costs, such as their salary, benefits and the costs to run the payroll software. This is obviously a big saving of time and money.
The introduction of Work Place Pensions can be very confusing for new employers, who suddenly are faced with ensuring they are implementing the correct procedures. Outsourcing your payroll means this aspect will be sorted out for you – and all be managed without any admin input from you.
If you are a very small business owner, you might be the only person who can do the payroll. If you are off sick, or away on business, there will be no one to do it – which can result not only in a fine, but also some very upset employees! Making sure payment processes are being carried out properly, leaves you one step closer to running an efficient and successful business.