When considering whether or not to outsource your payroll processing, you should know the Pros and Cons of doing so. These include the cost, time-consuming process, and potential loss of control. Let’s review these pros and cons and make an informed decision. Listed below are some of the cons of outsourcing payroll:

Disadvantages of outsourcing payroll

Outsourcing payroll services from ADP.com can provide businesses with a range of benefits. A team of experienced professionals will handle the complex calculations and processes that come with payroll. They have experience solving problems for businesses across a range of industries. Outsourcing allows business owners to focus on their products and services and spend time with family. Outsourcing will enable them to focus on their products and services.

Outsourcing payroll services are beneficial for small-to-medium-sized businesses. However, while one staff member can handle payroll, this can lead to problems when that person is ill, on holiday, or unable to work. Another disadvantage of in-house payroll is that a minor payroll team may not be able to cope with a significant recruitment drive. On the other hand, n the other hand, outsourcing payroll services have a larger group of specialists and can handle large numbers of employees.


The costs of outsourcing payroll services vary. The essential cost can range from $20 per employee to $100 monthly. Most providers charge by check and per employee, with a base accounting fee. Aside from the essential cost, additional taxes may be incurred, so you should ask for a quote. Many BPOs specialize in this area and market to SMEs. Some of the best providers charge between $20 and $100 monthly.

Aside from taxes, payroll providers may charge fees for various services, such as per-envelope stuffing, direct deposit, and check-to-sign. Other prices may include emergency paychecks, new employee reporting, and payroll adjustments. However, these costs are negligible compared to the overall savings you can get by outsourcing payroll functions. Therefore, it is vital to understand what services you need and the total cost before making a decision.


Processing payroll requires a lot of attention to detail and can be time-consuming, especially if you’re already overworked. Outsourcing your payroll to a professional company can save you valuable time that can be better spent on other, more critical, business priorities. If you’re wondering if outsourcing payroll services is the right choice for your business, read on for some helpful tips.

Outsourcing payroll services relieve you of the burden of dealing with the administration of employees’ payrolls. Payroll processing involves a series of steps and requires compliance and administrative tasks. These payroll processes include quarterly tax filings and federal and state regulations. By outsourcing payroll services to a professional, you free up your time to focus on the core aspects of your business. In addition to processing payroll, the outsourced provider can also handle HR-related tasks such as employee benefits and insurance.

Loss of control

While payroll outsourcing can save time and free up human resources (HR) staff for more critical projects, risks are also involved. Specifically, it can leave companies without control over confidential and financial information. In addition, as the data on your employees is stored on a payroll firm’s server, your company is leaving itself vulnerable to theft and employee lawsuits. Fortunately, steps you can take steps to protect your company’s financial data.

A primary concern is security. The transfer of payroll data is complicated. Inexperienced staff and inadequate preparation can cause security breaches. A poorly-transferred data can lead to compromised service delivery and delayed paychecks. Furthermore, data security is a significant concern, so make sure you choose a provider with a proven history of security protocols. If you are not confident that your provider can ensure data security, you should find another provider.


Several risks and responsibilities accompany outsourcing payroll services. These issues include regulatory compliance, timely and accurate payroll processing, and ensuring that the service provider meets deadlines. While an in-house payroll manager is still responsible for ensuring that employees are paid accurately, and on time, an outsourced payroll provider is responsible for these aspects and is liable if it doesn’t. Outsourced payroll service providers are also liable for penalties and fines if they don’t adhere to regulations and other rules.

Whether you choose a PEO or an outsourced payroll service provider depends on your business circumstances. PEOs, for instance, can handle various HR tasks, such as benefits administration and payroll tax compliance. However, in a co-employment arrangement, the outsourced payroll provider only handles the payroll and not the other administrative tasks. Some companies choose an outsourced payroll provider for limited payroll and tax management, while others only need tax help. In either case, you maintain responsibility for your employees, and the risk of non-compliance lies with you, so you should be clear about the conditions and risks before you sign a PEO contract.

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