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Benefits of Outsourcing Payroll Services
Last updated:
May 30, 2025
Running your payroll services in-house can be time-consuming and costly, especially if you get things wrong. To avoid costly mistakes, consider switching to an outsource payroll service. The benefits of outsourcing payroll go beyond just saving time and money—it ensures accuracy, compliance, and employee satisfaction.
In this article, we outline the benefits of outsourcing payroll, outsourcing advantages and disadvantages, and whether payroll outsourcing is the right fit for your business.
What do Payroll Outsourcing Services include?
Outsource payroll services from chartered accountants like ARB Accountants usually include the entire payroll function, from set-up through to HMRC submissions. But, often, you can also choose to only outsource certain parts of your payroll function to help relieve your administrative duties where necessary.
The various elements of outsourcing payroll services include:
- Set-up/new starter set-up
- Pension enrollment
- PAYE & NI calculations
- PAYE & NI advice
- Payment processing
- Pay slips
- HMRC payroll submissions
- P60 generation
Learn more about ARB Accountants’ outsourcing payroll services in Essex, including what each of these functions involves, here.
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5 benefits of payroll outsourcing services
Save time & money
Payroll can be very time-consuming and, depending on the size of your business, could require you to hire multiple people to get the job done. Payroll outsourcing services not only negate the need for in-house, qualified payroll staff, but save you time on small administrative tasks that all add up throughout the month.
Allowing payroll outsourcing services to take over your payroll function means that you don’t have to worry about the mammoth task of payroll, but your employees remain happy with accurate, timely wages and payslips.
Additionally, outsourcing payroll costs are often lower than maintaining an in-house payroll department.
Avoid penalties with HMRC
One of the biggest risks associated with payroll outsourcing is choosing an unreliable provider. Payroll outsourcing services ensure that your payroll function is fully compliant, and minimizes the risk of penalties from HMRC. Chartered accountants, like ARB Accountants, are fully up to date with current legislation surrounding payroll and pensions, meaning that less time is spent on head scratching, and more time is spent on your payroll function.
What’s more, we can also process pensions, bonuses, and other benefits during this time, ensuring regulatory compliance, accuracy, and speed.
Data security & GDPR compliance
Handling payroll in-house comes with a lot of risk due to the level of personal data required. You might think that having secure software removes this risk, however you must also consider the security of your network, servers, and whoever actually uses the software.
Quality payroll outsourcing services, like our Payroll Service at ARB Accountants, store personal data on highly secure servers, and are trained to handle sensitive data and personal information.
Improved accuracy & employee satisfaction
Payroll mistakes can be painful for everyone involved, but they usually hurt your employees the most. Outsourcing your payroll function to experienced accountants leaves no room for error, meaning that not only are your books accurate, but your employees are satisfied with accurate wages.
Speed
An in-house payroll function can take the entire month to process properly, depending on the size of your business. Outsourcing your payroll services to the experts speeds things along considerably, regardless of business size or payroll complexity, and doesn’t compromise regulatory compliance.
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What Are the Risks Associated with Payroll Outsourcing?
While the benefits of outsourcing payroll are clear, it’s important to consider potential risks:
- Data breaches – Choosing an unreliable provider can compromise payroll security.
- Compliance mistakes – Working with inexperienced providers may lead to HMRC fines.
By selecting a trusted provider like ARB Accountants, you minimize these risks while maximizing the benefits of outsourcing payroll.
Absolutely outstanding. I’ve been working with Saurabh now for just over a year and he’s been nothing short of excellent with my account management, answering queries and providing general business support. Always available when I need them. Five star service overall.
Jade Fubara
Payroll Services in Essex
ARB Accountants provide Payroll Services in Essex and beyond. We can help you save time and money, and ensure regulatory compliance, and offer all the benefits of outsourcing payroll, whether for your entire payroll function or specific elements as needed. Get in touch with us today to book a free consultation where we can discuss your needs, your business, and provide you with a free fixed fee quote.
Frequently Asked Questions
1. What are the benefits of outsourcing payroll for small businesses?
The benefits of outsourcing payroll for small businesses include reduced administrative workload, cost savings, and improved compliance. Instead of managing payroll in-house, businesses can use an outsourced payroll service to ensure accuracy, avoid penalties, and focus on growth.
2. Why outsource payroll instead of managing it in-house?
Many businesses ask, “Why outsource payroll?” The primary reasons include reducing errors, ensuring timely salary processing, and avoiding complex tax regulations. Outsourcing also eliminates the need to invest in payroll software and in-house expertise.
3. How much do outsourcing payroll costs typically amount to?
Outsourcing payroll costs vary based on factors like business size, payroll complexity, and the level of service required. While outsourcing may seem like an additional expense, it is often more cost-effective than hiring in-house payroll staff and maintaining payroll software.
4. What are the risks associated with payroll outsourcing?
Businesses often ask, “What are the risks associated with payroll outsourcing?” The main concerns include data security, choosing an unreliable provider, and losing direct control over payroll operations. However, selecting a reputable payroll outsourcing service mitigates these risks.
5. Is outsourcing payroll worth it for companies with fluctuating staff numbers?
Yes, one of the key benefits of outsourcing payroll is scalability. Whether you have seasonal workers or fluctuating staff numbers, an outsourced payroll service can quickly adjust to your needs, ensuring smooth payroll management without disruptions.
6. Can outsourcing payroll help with tax compliance?
Absolutely! One of the biggest benefits of outsourcing payroll is that professional accountants handle tax calculations, deductions, and submissions, reducing the risk of HMRC penalties and compliance errors.
