Payroll outsourcing is picking up a quick pace in the global business landscape. Its rapid rise is rather justified, given the fact how many businesses find payroll management to be a laborious task that doesn’t even add to the revenue of the company. On top of that, a slight miscalculation can lead to a butterfly effect and cause major penalties and even legal action.

As much as business owners try to keep penalties at bay, most of them don’t realize there’s a limit to how much they can try to fix things at their end. An organization’s payroll management can be only as efficient as its payroll team and the software implemented.

To help you make an informed decision, we bring you 5 signs that your organization needs payroll outsourcing:

Too Many Payroll Mistakes

There’s no doubt about the fact that mistakes in payroll calculation can cost a company a lot in penalties. Apart from monetary losses, payroll mistakes also invite statutory grievances and legal complaints from the government as well as employees. Frequent payroll mistakes are also a sign of overworked administrative staff. Frequent miscalculations in payroll processing are one of the signs that you should go for payroll outsourcing.

Payroll Processing Takes Too Much Time

Payroll processing must be accurate and error-free, but that doesn’t mean you need to spend countless days getting it right. Payroll is complex, but it’s not a maze that just can’t be solved. If you find your payroll department spends a lot of time in getting payroll processes complete, you know you can use them for another task. Payroll outsourcing firms are experts in complex payroll processing. The correct approach will be to outsource payroll and let the in-house payroll department handle other aspects of it.

Employee Concerns are Rising

A rise in employee concerns about salaries can be due to the previous two signs. But if you’ve been too busy in business operations to notice the mistakes and numerous hours spent in payroll processing, a rise in employee queries does work as a clear signal. From miscalculation of incentives to missing a due increment to sometimes missing a salary altogether, a rise in payroll-related employee grievances is a clear sign that you should opt for payroll outsourcing services.

Difficulty in Staying Compliant

Compliance policies are dynamic. Given the current working conditions with the global pandemic forcing companies to change the way they work, new statutory and health policies also keep coming up. Staying updated with all policies, guidelines, rules, and regulations is easier said than done. Your in-house payroll department is already buried neck-deep in day-to-day tasks. Keeping up with the policies becomes an essential objective but also turns into an overhead. In such situations, outsourcing your payroll can prove to be a big sigh of relief.

Payroll outsourcing companies have a dedicated compliance department that keeps up with all updates happening in the rules and regulations. This allows them to deliver high-quality services without worrying about compliance issues.

Your Payroll software is Giving You Nightmares

Or even worse, you are not using payroll software and doing all the payroll calculations on excel/spreadsheets. As a business owner, you know how hard it is to keep your payroll software updated to its latest version for integrity and security reasons. Moreover, adding a new feature to existing in-house payroll software is also a time-consuming task. And just in case you have subscribed to a SaaS-based payroll system, any updates and features are at the mercy of the SaaS provider.

When you outsource your payroll processes to a third-party payroll firm, you won’t need to worry about updates and features at all. The company will take care of its software to deliver streamlined services to you.


You don’t need to wait for all the signs mentioned above. Even a single sign from the list mentioned above is sufficient to choose a payroll outsourcing company. Don’t wait until it’s too late.


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