How Much Does It Cost To Outsource Payroll?
About 100,000 companies all over Canada, varying in sizes, have embraced the advantages of outsourcing their payroll.
As someone who runs a business, you understand that dealing with processes related to payroll is among the most complicated tasks you have at hand. This is particularly true if your business has many employees. Aside from the fact that you have to ensure that your employees are paid right on time, and in the accurate amount they deserve, payroll also involves other related tasks, including the need to withhold all applicable local and national taxes out of the earnings of your workers. This means the need to pay your share of taxes for every employee, updating records on sick leave and vacation pay. Good news, though, is that there are companies offering professional payroll services. By reaching out to them, you can avoid all of these time-consuming tasks, thus focusing your time, energy and resources on more essential tasks.
How Does Do They Cost?
When it comes to determining the actual cost that you need to pay in order to outsource payroll, what we are able to do is speculate and estimate. This is because most payroll companies do not really state their rates openly. The reason? There are different factors that they need to consider before a quotation is given to their clients.
At the same time, every company may require a different amount of time, as well as effort in transitioning their payroll processes to an actual payroll provider. Still, there are companies who offer open pricing to companies with a particular number of employees. Others also offer pricing based on a “per employee per payroll” rate as basis.
While we may not be able to get the actual price that you can expect the moment you sign up with an outsourced payroll provider, there are some guidelines that you can take into consideration, and they can serve as guide for you when anticipating the costs involved.
Guidelines on Charges
- Setting Up Fees – This fee is for the actual “set up” of the payroll system. Usually, this comes with a price of $100 and above. The actual amount may vary depending on the number of employees that your company has.
- Payroll Processing Fee – In Canada, the base fee per payroll is $20, plus $1.50 for every employee, per payroll.
- T4s and ROEs – Usually, this is priced at $2 for every employee per payroll.
Please understand, however, that some payroll service providers may charge additional for things such as using a logo on paystubs. As a tip, you may want to carefully read the fine print so that you will know what other charges are required.
Why Outsource Payroll?
Now that you have already considered the basics behind the costs that you can anticipate to pay if you want to avail of the benefits of outsourcing payroll, you may also want to learn more about the benefits that you can get out of the money you invested.
For one, the team handling your payroll will have full capabilities in calculating the taxes of your employees, EI, CPP, as well as other source contributions or deductions which are due to other 3rd party companies, as well as other government institutions. They will also take charge in withdrawing the exact funds needed coming from your account.
Payment will be given to your employees through methods such as Cheque or Direct Deposit. They will also handle remittances to the government, as well as other third party institutions. Other items such as commissions, bonuses, expenses as well as other related things are also handled accordingly. As the client, you can expect some documents coming from the outsourcing team, showing all the details of the transactions involved.
The Benefits of Outsourcing Payroll
There are a number of benefits that you can expect out of hiring the services of an outsourced payroll provider. One factor is the cost. True, you need to pay and spend money in order to outsource the services of a different company. However, if you look closely into the cost of the services in relation to the time that you spend completing your payroll, you may find out that this time can be allocated to other aspects that will benefit your business even further, including customer service and HR solutions.
Unless you are an expert in payroll solutions yourself, you may find it more beneficial to handle the tasks to actual experts in this field. Payroll companies and service providers serve as home to actual specialists who are updated with all of the regulations involving businesses, thus making sure that you will always be covered. These experts may even give you occasional advice regarding tax options which can deal a specific compensation plan.
By outsourcing payroll, you can also free yourself from the potential risks involving government penalties and fines. Some companies unfortunately find themselves in a huge mess just because they forgot to remit their taxes right on time. If you are among these companies, it may be high time for you to finally acknowledge the fact that you need help. Make sure that you take into consideration the actual savings that you can get by outsourcing your payroll system.
As you do all of these things, you will not be the only one who is happy in the end. Even your employees will feel happy upon knowing that they are satisfied because of the accurate pay that they receive. Among the most common reasons of unhappiness and dissatisfaction among employees are inaccuracy in payment of salary, as well as not giving them on time.
About 100,000 companies all over Canada, varying in sizes, have embraced the advantages of outsourcing their payroll. If you have not yet done so, note that outsourcing your payroll responsibilities is one of the decisions that you need to make for your business. It is also one that needs some analysis involving cost vs. benefit. True, there are certain costs that may be involved, but the benefits that you can get will surely outweigh these costs.