Payroll Provider

The Many Disadvantages of Outsourcing Your Payroll Services

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If truth be told, outsourcing became a hit in the global mainstream business enterprise due to the surge of the IT and software industry in the past few years primarily in developing countries. Moreover, a lot of different types of companies nowadays use outsourcing services as a means to develop their business. While there are many advantages to this practice, there are disadvantages of payroll outsourcing as well.

Let’s start with the big problem first. By handing over your payroll information and control to an outsourced provider, you hand over critical information that can destroy your business.

Imagine, if you will, what would happen to your organization or business with a contractor doing your payroll this week. Answer these questions below and see how many you would confidently answer yes to.

  1. You know all the legal payment rates, allowances, and awards for all your employees.
  2. You understand your superannuation obligations.
  3. You easily understand how to calculate or check your pay as you go tax payments for each employee.
  4. You would detect if payments went to a fake or non-existent employee.

The management of payroll can be worse than doing it

Before you outsource your payroll, I want you to think about a few facts first. You will need to have all the payroll information ready to hand over to the contractor anyway.

Then you will need to explain any organizational documents, timesheets, and employment contracts before they get started. On top of this, you will need to spend extra time checking their work to ensure that it is being done correctly.

I would suggest that you give them a sample set of timesheets and get them to demonstrate that they are capable of managing the payroll before letting them loose in your systems.

This will also require that you update your insurances to cover any problems that might arise from using payroll services and stoppage of employees’ wages.

Remember that they will have all your employees’ personal records and taxation information that needs to be protected under the Privacy Act and they have not given permission for you to hand it over to a contracted payroll provider.

select payroll companyIt becomes easier to hire your own payroll employee and keep control over the work.

Your employees will still blame you

When payday comes and goes, your employees will not care about who does the payroll. When employees are not paid they will come to you for a solution. This means you will have to chase the payroll service provider and hope they can explain the situation and fix it quickly so that your business can get back to work. learn more detailed information at

It is not a rare event, but payroll contractors have been known to make payments to themselves or clean out your bank completely without you knowing for days.