Payroll can be a real pain. If the paperwork and complexities are distracting your focus from growing (or simply running) your business, outsourcing payroll might be the secret to winning back precious time.
The proper payroll outsourcing setup can make any business more productive and compliant while reducing costs.
Let’s dive into the topic to understand why and how to outsource payroll, plus what to expect from an outsourced bookkeeping service.
The benefits of outsourcing payroll
Payroll is complex and time-consuming. Even processing regular staff pay involves complicated calculations to ensure you meet tax and overtime obligations, pay the correct benefits and claim the right deductions.
And that’s before tax time makes payroll even more complicated.
So one benefit of outsourcing payroll is reducing the time it takes to process staff pay. But there are many more:
- Ensuring employees are always paid the correct amount
- Meeting tax obligations (and avoiding penalties)
- Making regular retirement contributions
- Accurate record-keeping
- Save money (compared to hiring an internal accountant)
- Reduce the stress of payroll
- Better cashflow tracking
It’s no wonder so many tradies, contractors and building companies choose to outsource some or all of their payroll services.
What payroll services can you outsource?
Bookkeepers offer different levels of payroll support. You can mix and match services with a bespoke SLA or partner with a payroll service provider for a complete package that includes:
- Calculating pay and leave
- Calculating and lodging payroll tax
- Calculating & lodging PAYG withholding with the ATO
- Claiming deductions and benefits
- Keeping detailed financial records
- Filing Pay runs with the ATO
There are two common models for outsourcing payroll to a bookkeeper.
Handing over the reins to a provider who manages the entire process. This goes beyond calculating and processing pay to include collecting timesheets,
preparing group certificates and ATO filings, processing terminations, superannuation and more.
You still undertake basic admin tasks like collating timesheets and keeping employee records. The payroll provider calculates the pay, deductions, reimbursements and tax obligations based on the data you provide
Full-service payroll outsourcing takes all the stress of payroll away but costs more (as you might expect).
In the DIY model, a professional bookkeeper will often set you up with accounting software like Xero to streamline the process.
We recommend speaking to a payroll service provider to find the service that suits your business.
What to look for in an outsourced payroll provider
No business can afford to roll the dice with payroll. So it’s essential to know how to spot a high-performing, service-minded payroll partner.
Partnering with a full-service payroll provider means the relationship can scale as your business grows. Even if you start with DIY or hybrid services, choose a bookkeeper with the capability to solve your business challenges.
Working with an experienced local team means you are entrusting your mission-critical payroll services to people who know your industry.
Ask the provider about data security. They should have strict protocols and watertight security measures in place to ensure your financial data is safe.
Ease of working together
Does the payroll provider set you up with automated accounting software? Are they easy to work with generally? First impressions are often a good indicator of whether the relationship will be successful, so make sure to meet in person.
Linc Accountants: Full-service payroll and bookkeeping partners
We know it helps to have experienced accountants on your side. Here at Linc Accountants, we offer scalable payroll outsourcing services for small and growing businesses.
Our services save time and money, reduce the stress of payroll, and ensure end-to-end payroll accuracy, with a fully customised Xero Setup Service to streamline your operation. Contact Linc Accountants today to take the stress out of payroll with professional, affordable outsourcing.