Thursday, 8 April 2021

Why You Need a Payroll Outsourcing Provider?

Payroll outsourcing companies now abound. It is a business yes, but how is it going to help your business? That is a fundamental question that any employer will consider before going the whole hog and signing up for payroll services. You have been paying your staff wages – you have already done so for quite some time – then why worry? Why needs a hand? Well, it is the legislative compliance that is the tipping stone because that is what catches most employers napping.

An example:

For instance, during NMW compliance investigation, it was found that business X was employee volunteers from some European countries at less than the minimum wage because:

(a) the volunteers had agreed to the lower wage rate and were happy

(b) they thought it would be a means of improving their English and skills in the UK

There were a lot of other factors of course that too had to be considered but the end result was that the employer was found at fault for having not paid his staff as per the National Minimum Wage. He had to pay a penalty plus arrears and all the legal headache to suit.

Is it then wonder when people choose to outsourcing payroll services? The same factor creeps in when we consider the Employment Contract. No Employment Tribunal looks kindly on an employer who hasn’t got an Employment Contract in writing and yet you will find scores of employers missing this extremely fundamental aspect. The result is simple. Even if the case is in the employer’s favour, they are going to be penalised for lack of employment contract – that’s obvious.

outsourcing payroll services

Saves you compliance-related hassles

It is hard to keep yourself ahead of the compliance as the legislation keeps on changing. It is hard for employers to be on top of these changes as are you going to focus on updates or on working on improving upon your business? Plus, compliance-related hassles can prove expensive because there can be penalties and that too high ones, that you might have to end up paying. As has been recounted in the above example, the employer was unaware that the NMW needed to be paid in all circumstances – even if the employee has supposedly agreed otherwise.

For instance, when we are dealing with a person who has been an apprentice for a year, there is a transition to the age bracket minimum wage from the apprenticeship wages that were applicable for the set year.

Helps build a better employer-employee relationship

Outsourced payroll providers can also help you as an employer because what do employees want? Simple, their pay checks on time and that too without errors! As an employer, you might have found that a lot of your time can be taken up on employee questions related to statutory payments and other such queries. In fact, for those employees who have other social security payments like Universal Credit – getting the accounts accurate is even more important as if there are discrepancies found then there can be problems related to their payments.

DEA, AEO, DBS and other factors

For payments towards fines, it might be hard for you as an employer to keep track and make the correct pay element. Thus, it is safer to have an expert look into things. DBS checks are mandatory if you are running a sensitive organisation like perhaps a daycare centre or a nursing home. Thus, there are many other legislative requirements that exceed the mere processing of payslips and such like. Therefore, experts are required for this.

Saves time as well as money

For an employer to sit down and do payroll is a time-consuming process. Especially since the paper method is not the method that the HMRC any more expects except in special cases and that too – very rare cases. Thus, there is no point in expending money in costly payroll software, learning it and hitting your head as you try to wrap around what has to be done.

Why spend more when you can get the same at less?

Payroll outsourcing UK is now a trend because when you can outsource and get the same quality and level of expertise what sense does it make to pay more? GDPR should not be an issue to stop you as these providers are mostly GDPR compliant. After all, taking care of your business is their bread and butter.


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