Outsourcing is often thought of as a negative word when it comes to business. But in reality, contracting out certain services to an outside company can be beneficial to a business’ operations, bottom line and even employee satisfaction. Here are four things outsourced payroll providers can help you do that are hard to do on your own:
- Improve Internal Productivity
The biggest reason to hire a payroll processing company is that doing so will allow your employees to focus on doing what they do best. Payroll and accounting are specialized fields, and learning to do them takes time — even more time if your employees are taking on these new tasks on top of existing workloads. Labor costs can rise further if you hire a dedicated team to handle these aspects of your business. It’s much more efficient and cost-effective to let an expert firm figure out how to pay employees in the best ways.
- Ensure Compliance With Laws
Do you know how to calculate payroll deductions? How to figure overtime pay for exempt employees? How to deal with foreign employees working in Canada or Canadian employees working for an international company? Unless you’ve spent years studying, the answer is probably no. Payroll and tax laws can be extremely confusing, and deviating from them can lead to, at least, administrative headaches and, at worst, significant government penalties.
- Offer Services to Employees
Your employees, too, are likely to be happier if their payroll is handled by an outside company. Not only will a dedicated company reduce the likelihood of payroll errors — something that’s good for both your company and your employees — they may be able to handle more detailed guidance than your internal human resources department. For example, a company might provide a payroll deductions calculator to employees so they can decide how best to fill out their forms (though there are a few different approaches, a payroll deductions calculator will generally show how various deductions affect take-home pay and year-end taxes).
- Utilize Employer of Record Benefits
Outsourcing payroll can do even more for international companies who wish to operate within Canada. Instead of merely processing cheques and double-checking figures, a payroll company can become an employer of record for workers within Canada. Essentially, this means that the workers become employees of the payroll company, rather than of the international corporation. This can simplify numerous aspects of tax and payroll processes.
Which of these benefits most appeals to you? Not worrying about tax laws? Offering your employees a payroll deductions calculator? Being able to hire international employees without jumping through logistical hoops? Discuss in the comments section.