9 Leading Outsourced Payroll Companies for 2025

Outsourced providers stay current with anything affecting payroll and help ensure businesses comply with relevant tax and employment legislation, reducing the risk of costly legal issues or fines. The best payroll outsourcing companies offer more than just paycheck processing — they deliver reliable support, compliance expertise, and tools that grow with your business. Generally, businesses can expect to spend between $30 and $100 per person each month for outsourcing payroll services. Wondering whether the benefits of outsourcing payroll services could help your company? Some payroll companies offer additional services or perks as part of the cost of their payroll services that your company doesn’t really need or use. For Forbes Advisor SMB, Dennis covers HR, payroll, payment processing, business formation and many other products and services for small and midsize businesses.

An administrative services organization (ASO) manages some or all aspects of a business’s human resources operations and works in conjunction with the company’s HR staff to deliver the services to managers and employees. Total cost for HR outsourcing services thus ranges from about $1,500 a month for a 10-person company to $15,000 a month for a 100-employee organization. In the first category are vendors such as Vero HR, Paychex, Acadia HRO, ExtensisHR and Alliant, all of which take a modular approach to HR outsourcing or offer services geared toward small businesses, midsize companies and enterprises. One area where Acadia’s services stand out is its time management system that makes reporting employees’ hours worked fast, simple and accurate. When you outsource payroll, the provider takes over the administrative and compliance tasks involved in paying employees.

If you do not want to outsource payroll, consider using software to process your employees’ payments and taxes. At the end of the day, the company is still responsible for properly compensating its employees, signed contract or contract signed by me and problems created or left unresolved by the provider will continue to cost time and money until they’re addressed. If these functions are passed along to a payroll outsourcing provider in a country with generally lower salaries and wages, much of the difference in employee compensation is recouped by the client company and savings can be significant. Once a payroll outsourcing provider has been selected, both parties must agree on “terms of engagement.” This is when the provider’s specific duties are officially established and also when compensation for services rendered is addressed. The payroll processing company submits payment to your employees, either through physical checks or direct deposit straight into their bank accounts.

What do payroll services typically include?

According to a 2022 Statista survey, 12% of organizations worldwide fully outsourced payroll functions in the year 2019, while 26% of organizations co-outsourced payroll—meaning they outsourced some (but not all) payroll functions. A good provider will make things easy for the client, but client companies shouldn’t be lured into a false sense of security. Perhaps even more concerning is the increased risk of a breach of sensitive data that outsourcing inevitably brings. Outsourcing payroll means giving up direct supervision of at least some of its many processes.

Arranging Payroll Outsourcing

To learn more, speak with one of our friendly experts — and see how ‌Remote can help your business. Remote can do all the heavy lifting for you, giving you peace of mind and allowing you to focus your time, money, and resources elsewhere. However, this can easily lead to inefficiencies and unnecessary staffing costs, and make it difficult to build trustworthy relationships. If you’re thinking of outsourcing, finding, vetting, and working with multiple third parties is one option.

Outsourcing Payroll: All You Need to Know

Those who manage their own in-house payroll often use software programs to help them track hours and calculate earnings. Payroll outsourcing is a common practice that has a number of advantages and disadvantages to consider. While many companies handle this duty in-house, others choose to outsource it to third-party companies.

• It serves 10,000 clients across all 50 states with solutions for daily, weekly, and monthly payroll tasks.
• Managing payroll in-house requires a significant time investment and attention to detail.
• A payroll error costs $291 on average per Ernst & Young.
• When analyzing cost, it’s important to remember that outsourced payroll has a knock-on effect.
• While all three Paychex offerings provide dedicated HR guidance and expert-led training, the entry-level HR Partner Plus sticks with the basics of an employee handbook builder, labor posters, HR library and an employee assistance program.

Best for Growing Businesses

This means you get professionals who work exclusively for your business, understand your specific processes, and grow with your company rather than juggling multiple clients. The decision to outsource to a payroll company or an independent contractor depends on several factors, including the size of your business, the complexity of your payroll needs, and your budget. Errors can result in overpayments, underpayments, or incorrect tax filings, which could lead to penalties or upset employees. Their expertise can be particularly beneficial for businesses that operate in multiple jurisdictions, countries, or regions with varying tax laws and reporting requirements. Most businesses start off administering their own payroll.

Workforce consolidation from acquired companies. Easy contractor-to-full-time conversions. Process in-country payroll in 35+ regions. Affordable mandatory and add-on localized benefits. The salary expectations of payroll professionals in LatAm are $18K to $33.6K annually compared to $53K to $84K for their US peers.

What factors should I consider when outsourcing payroll?

• Outsourcing payroll takes the guesswork out of the process.
• Before the payroll processor can write the checks, they must deduct the appropriate employee selected withholdings and required state and federal withholdings from the net pay amount.
• Comprehensive hiring guides in 180+ regions to make global hiring even easier
• Like individuals, businesses must also complete a yearly income tax return, and payroll figures are included as a deduction on these forms.

The advantages to using payroll outsourcing companies stretch further than just a phase of your business’s growth. The reasons for outsourcing payroll vary among employers, but they all boil down to taking a time-consuming, error-prone process off HR’s plate. There are many payroll outsourcing solutions designed specifically for businesses of all sizes. Explore our insights on why global companies outsource to the Philippines and unlock a scalable, cost-effective payroll solution for your business. Additionally, 58% of respondents identified compliance as a top area for improvement in payroll provider services. By outsourcing all that work to a payroll provider, you save an invaluable amount of time and resources — especially if you’re a small business.

Then, whenever you’re asked to approve payroll, check how the vendor processed the employee in question. For a better employee experience overall, you need a provider that manages more than just payroll — ideally in a single software. Here are a few tips for outsourcing payroll with confidence. For instance, a tight-knit company experiencing overnight growth might not be prepared — or even know how — to compensate new employees fairly.

Provide reports

When checking out providers, dig deep what is a journal into their customer support processes. For instance, some providers incorporate hidden termination fees when an employee leaves, or charge sizable sums to transfer to a new provider. Ask potential providers how they guard all the sensitive data they handle and don’t settle for platitudes.

Decreased Data Security

Periodic reviews of local, state, and federal requirements are also key in maintaining compliance. It serves 10,000 clients across all 50 states with solutions for daily, weekly, and monthly payroll tasks. CPS is a payroll-centered solution founded in Springfield, Massachusetts.

How PTO Approvals Contribute to Decision Fatigue for Managers and HR

Payment processor Square has implemented an outsourced payroll solution aimed at small businesses. It offers comprehensive administrative tools and online payroll services, including employee portals and tax filing. Payroll service providers are staffed by professionals specializing in payroll processing. By outsourcing payroll, you free up internal resources that you can use for more strategic tasks within your company, like improving business operations, customer support, or expansion efforts.

Nowadays, many companies do the opposite and outsource critical functions such as customer service and money-management tasks. In the early days of strategic outsourcing, companies were most comfortable hiring away low-skill tasks distant from sensitive how to make pro forma balance sheet business areas. However, it’s important to consider the potential risks and downsides before committing to an external payroll processor. If you’re ready to outsource your payroll, it’s wise to vet potential companies before committing to work with them. While some offer only the necessary payroll processes, others can perform a number of other human resources and finance-related tasks.

Once the payroll processing company has all the information they need, you’ll provide any wage garnishment information or bonus payment information and approve paycheck totals for your employees. Many external payroll processors use digital time tracking software that they, you and your employees can access to make time tracking easy for everyone. Depending on whether employees are salaried or hourly, you’ll need to track and submit timesheets to your payroll company. For small businesses in particular, there’s usually a single employee who manages the payroll process. These laws also change regularly, and without proper education and training, employees can make unintentional, but costly, payroll tax errors. The time and resource cost of performing payroll in-house is almost always more expensive than the monthly cost of having a dedicated payroll company handle the process.

Some mistakenly believe outsourcing payroll services include HR services that help you hire new people, but HR and payroll outsourcing are different. By outsourcing payroll, you’re entrusting a third party with the data that matters most to employees. Penbrothers stands out as a top-tier provider, offering comprehensive offshore payroll services for growing businesses. With the right provider, businesses can streamline operations, maintain compliance, and ensure accurate payroll management. When you outsource to a global payroll specialist, you also avoid other potential costs due to noncompliance, such as miscalculated overtime or an incorrectly submitted tax form. Square’s payroll services are ideal for small businesses, especially those already using Square for payments, offering easy integrations, automated tax filings, and direct deposit options.