The True Cost of Keeping Payroll In-House
paycor pricing

The True Cost of Keeping Payroll In-House

Will processing payroll in-house save you money? A recent PricewaterhouseCoopers study investigated whether it is more cost-effective for small and mid-sized companies to keep processing their own payroll or to outsource the job. The majority of companies in the study assumed that outsourcing their payroll processes would be more expensive; however, the opposite turned out to be true.

Things to consider when outsourcing payroll

When evaluating the costs of different ways to do payroll, there are many expenses to take into consideration. Several of these are expected by those who are making the outsourcing decision:

* Cost of installing and running a system (to record hours and/or process the payroll)
* Salary and benefits for the people doing the payroll
* System maintenance costs
* Outsourcing costs

There are many other expenses, however, that people are less likely to think about:

* System upgrade costs
* Labor costs for time wasted on distributing paychecks, answering employee questions about payroll and benefits, time spent on processing hours and approving payroll
* Cost of correcting human or technological errors which may include extra labor, non-compliance penalties or even lawsuits

Recommendations for outsourcing payroll

1. According to the study, the best thing organizations can do to reduce payroll costs is to outsource. The companies who outsourced their payroll spent on average 18 percent less than companies who process payroll themselves.

2. An additional suggestion to reduce expenses was to outsource other functions that complement the payroll process, like time and attendance, health and welfare benefits and workforce administration. The most cost-effective result was using one provider to cover all outsourcing needs.

The bottom line

Most companies were surprised that outsourcing was found to be less expensive; however, the cost of installing and maintaining a system in-house coupled with the direct and indirect labor costs ended up being pricier than paying a provider to process their payroll. Payroll companies can help guarantee that payroll is done correctly to help avoid fines and excess labor costs.

Want to learn more? Check out the article 4 Tips for Outsourcing Payroll. Then, talk to us to learn more about our innovative payroll, HR and reporting solutions.

Source: PriceWaterhouseCoopers

More to Discover

EEO Compliance: Are You Prepared to File the Updated EEO-1 Report?

EEO Compliance: Are You Prepared to File the Updated EEO-1 Report?

On April 25, 2019 a federal judge announced a ruling that will require employers to collect 2018 employee pay data and hours worked by race, ethnicity and gender and submit it to the Equal Employment Opportunity Commission (EEOC) by September 30, 2019. On May 1, 2019, the EEOC decided that they will collect 2017 pay data in addition to the 2018 pay data that was previously announced. The EEOC is expected to open the portal for employers to submit 2017 and 2018 pay data beginning on July 15, 2019. Note: Employers are still required to submit component 1 of the EEO-1 form by May 31, 2019. What are the new EEO-1 reporting requirements? The current EEO-1 form requires company employment data to be categorized by race, ethnicity, gender and...

Paycor Wraps Up 4th Annual Holiday Market

Paycor Wraps Up 4th Annual Holiday Market

This month, Paycor hosted its 4th annual Holiday Market. Employees, from around Cincinnati, were invited to HQ for an afternoon of shopping, raffle prizes and tasty treats. The initiative for hosting the Holiday Market is simple. Our employees work hard year-round, and during the holiday season we feel as if we should reward their efforts. Not only is the event supposed to give associates a break during their busy day but it encourages departments to spend time with one another. In addition, we live to support our clients and love that we get a chance to showcase a handful of amazing people and local businesses. Some of the clients and local vendors included: City Scape Tiles The Candle Lab Bling Favorites Cincy Shirts Bengals Pro Shop...

HR Software for Small Business: 3 Things to Look For

HR Software for Small Business: 3 Things to Look For

Your Time is Valuable When you own your business, there are a lot of “you should’s.” You should network. You should follow up with prospects. You should build a brand. You should prioritize customer service. But no small business guru ever said you should do more paperwork. Or you should project manage every step of recruiting and onboarding new employees. Or that you should worry more about compliance. If you own a business, or if you think like an owner, repetitive administrative tasks can be time consuming. Any organization with one or more employees can benefit from payroll and HR technology. For example, take hiring a new employee. How much time does it take you or your team to: Write an offer letter Issue an I-9 and W-4 Write a...

Paying Employees with Paycards? The Pros and Cons

Paying Employees with Paycards? The Pros and Cons

With the rise and ease of direct deposit, paper paychecks have pretty much gone the way of the dinosaurs. But, did you know there’s another paperless option you can use to pay your employees? Paycards offer a distinct advantage to employees who are underbanked – those who have a bank account but rely largely on unconventional finance options such as check cashing services – or unbanked – those who don’t have a banking relationship at all. Their wages are simply loaded to a reusable, refillable card that can then be used at points of purchase or ATMs. Estimates from a 2017 Federal Deposit Insurance Corporation (FDIC) survey showed that 6.5% of households in the United States were unbanked, representing approximately 8.4 million...