What is in-house payroll?

In-house payroll is when an internal department handles payroll processing for the organisation. The staff who process payroll in-house are employees and are paid through the same payroll system that they manage. These employees usually fall within the human resources or financial department.

The benefits of inhouse payroll:

• Control over payroll processes - Internal payroll clerks can use or encorporate your existing procedures, or help you develop a payroll system that suits your specific company's needs. 
• Making last-minute changes or resolving issues can be easier and quicker than liaising with a payroll company.
• Inexpensive cost compared to outsourcing - Recent data from the Bureau of Labor Statistics shows that payroll and timekeeping clerks earn an average of €21.79 per hour or £47,390 annually. If you’re a medium-large company, the money you spend on payroll processing would be divided between a bigger pool, lowering the per-check cost.
• Data security, the fewer people or systems that your data travels through, the lower the security threat. 

What is outsourced payroll?

Outsourcing payroll is when a business chooses to hire a third-party company or individual contractor to process payroll for them.

The benefits of outsourced payroll:

• Simple setup, because payroll companies and software systems are already designed to follow payroll processes, you can easily provide your company’s information and step back.
• Streamlined processes. Integrating your various HR functions, like benefit structures or employee scheduling, is effortless with outsourced payroll solutions. 
• Compliance. Outsourced payroll systems use standard processes that closely adhere to compliance rules set forth by the state, federal government, and other governing agencies. 
• Accuracy. Not delivering paychecks on time could negatively impact employee relations and potentially contribute to turnover if the problem is persistent.

What should you choose?

To conclude, there are various factors to consider when deciding between in house and outsourced payroll. Some factors being company budget, compliance and data security, company size and payroll accuracy. It is best to consider all of the above factors before making the right decision for your company. 

If you want to have a conversation about how we can support you with recruitment or onboarding, what challenges there are in the market or have a confidential discussion about your own career, please do reach out to us on finance@savantrecruitment.com