Overview: Employers commonly outsource some or all payroll processes to a third party payroll service to be relieved of the responsibility for withholding income and employment taxes from its employees' pay, and for reporting and remitting the amounts withheld to federal, state, and local authorities, among other payroll tasks. For example, business process outsourcing (BPO) is a popular option for employers that want to outsource an entire function, responsibility, or department to a third party company. A BPO company can handle internal business functions such as HR, payroll, information technology, accounting, and customer service.
The decision to outsource should be based on the needs and goals of the employer. There are many advantages and disadvantages of outsourcing that employers should consider before making any commitments.
Some of the advantages include:
Some of the disadvantages include:
Author: Rena Pirsos, JD, Legal Editor
This How To maps out the steps employers should follow when considering whether, and how, to implement a paycard program.
This section helps HR and payroll professionals to understand the pros and cons of payroll outsourcing and various automated payroll system options.