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Several business houses in the US used to outsource their payroll service. But why? What benefits did they get by outsourcing it? Here you will know the reasons for which business outsource their payroll services.


But who can provide payroll services? Generally, it is better to go for certified CPA as they have the proper knowledge on this matter.

As per a recent survey conducted by Financial Executives Research Foundation, nearly 39% of US business used to outsource their payroll process.

The same survey also mentioned that 43% of the business used to outsource their payroll tax responsibility.

Before dig deep into the benefit, it is important to know how do payroll services work?

Payroll is associated with recording the compensation of the employees. It can include the followings such as:

  • Wages
  • Salaries
  • Commissions
  • Bonuses

However, it also includes the accounting of the taxes that are withheld. Examples:

  • Federal withholding taxes
  • State withholding taxes (if applicable)
  • Social security taxes
  • Medicare taxes

Generally, big business houses used to have their in-house payroll management, but most of the small and medium business are opting for hiring professional payroll services providers.

But what are the reasons for such outsourcing? Here are some of the benefits.


Time saver

A payroll service includes various accounting process as mentioned above. Therefore, it needs a huge dedication and time to do it in detail.

Each time the person responsible for it must type in large amounts of data and double-check any key errors. So, a huge workable time is lost.

On the contrary, when you outsource the payroll services, you get the time to focus on revenue generation and better customer services.

Money Saver

On hearing the term outsourcing, the common question comes to mind is how much payroll services cost?

Here you need to understand that in modern business, time is money. When you are saving your precious working time, it means you can utilize it for constructive works for your business.

Additionally, hiring in-house payroll services will nothing but incur a huge cost and liability. On the contrary, when you are outsourcing the payroll, you don’t have to take any headache.

Security Matter

Undoubtedly payroll services are complex matters. It is related to every single confidential data of the company and its employees. Therefore, trusting a singular employee with it can be a risky decision as there are chances of tampering and theft of data.

Buying the payroll software can be a cheap option, but how can you guarantee the safety of your data? It is possible that after a few years another business house will buy that same software.

Additionally, will the software company be able to guarantee you the safety of your data on their server or network?

On the contrary, hiring professional payroll services is a safer option. You can get the physical access of them at all the time. Being a third party, they always keep your data confidential and safe.

Stay updated with the government policy and regulation

CPA is the best option who can provide payroll services as they remain always updated regarding government policy and regulation. It is not possible for a business owner to focus on all the details of government regulation.

However, missing or misinterpretation can make the business owners held legally responsible. It can lead to even audits and penalties by the IRS.

Related Article: What You Must Know About the Payroll Mistakes?

In 2016 alone, 1.8 million tax returns were audited whose income was between $200,000 and $1 million. 978,564 businesses of all sizes were assessed civil penalties.

By hiring a professional, you surely avoid these problems.

Concluding Words

Therefore, you have seen the benefit of outsourcing your payroll services. However, in case you want to add anything, feel free to comment.

If you are looking for payroll services, get in touch with us.

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