By Karen Thomson, Payroll Partner, Armstrong Watson LLP

THERE'S no doubt cost saving is a major factor in choosing to outsource your payroll, with the average financial commitment of employing a qualified and/or experienced payroll professional up to circa £25,000 per annum, and that’s without taking into account fees for software, training etc.

Even if your business isn’t large enough to have a dedicated payroll professional, the time processing takes up, and the worry of making a mistake, are both great reasons to consider outsourcing.

Cost and time aside, there are lots of other benefits to outsourcing too:

• Ensures full control and compliance

• Helps resolve any process issues and reduces risk of errors

• Minimises leakage of payroll data, ensuring the General Data Protection Regulations (GDPR) are adhered to

• Provides better management information

• Improves the employee experience (especially where an employee portal is available)

• Easily enables acquisition and/or disposal

• Integrates processes

What to expect from outsourcing:

• You remain accountable for your payroll

• An external party will take on the responsibility for the everyday processing of the payroll transactions and ensuring you are compliant with the latest legislation

• There will be a formal contract in place, often referred to as a ‘Service Level Agreement/Engagement Letter’

• Typically the outsource contract would be expected to continue for 3 to 5 years, (due to the potential large undertaking of bringing it back in-house.)

• You may need to make changes to the way in which you work to make it work!

Key traits of a great payroll service provider:

When comparing service providers it can feel like apples and pears, but there are a few key areas that can make a huge difference to the level of service you receive, from the systems used - i.e. are they future proofed? - through to size, scale, experience, plus the ability to offer additional services too.

For further information on outsourcing your payroll please get in touch with Karen Thomson on 0808 144 5575 or email