Payroll has to be right every time. Mistakes affect people’s pay, create extra work and can lead to problems with Revenue. For many businesses, particularly those with shift workers, varying hours or a mix of employees and contract staff, running payroll in-house takes more time and specialist knowledge than it is worth.
Outsourcing can take that pressure off, but it works best when you are clear about what you are handing over and what stays with you.
Why businesses outsource payroll
- Accuracy: a specialist team processes payroll every day and keeps up with changes to tax, PRSI and USC.
- Time: managers and finance staff can spend less time on processing and more time on the business.
- Continuity: payroll does not depend on one person in your team being available.
- Compliance: since PAYE Modernisation was introduced in 2019, employers report pay and deductions to Revenue in real time, every time employees are paid. A provider that does this every day is well placed to get it right.
- Flexibility: it is easier to cope with growth, seasonal staff or a change in pay frequency.
What is usually included
Services vary, but a typical outsourced payroll service covers:
- Processing payroll on your chosen schedule, whether weekly, fortnightly or monthly.
- Calculating tax, PRSI and USC, and submitting payroll reports to Revenue.
- Payslips for employees.
- Setting up new starters and processing leavers.
- Handling deductions, overtime, shift premiums, bonuses and expenses.
- Year-end processing and reporting.
- Payroll reports for your finance team.
- Answering employees’ payroll queries.
Check exactly what is included before you sign up, and what would be charged as an extra.
What stays with your business
Outsourcing the processing does not mean handing over every decision. You will still be responsible for:
- Approving hours, timesheets and changes before each pay run.
- Decisions on pay rates, bonuses, overtime and HR matters.
- Providing accurate information on time.
- Funding the payroll.
The quality of what goes in determines the quality of what comes out. The smoothest arrangements have a clear process and a firm deadline for submitting hours and changes each pay period.
Questions to ask a provider
- What exactly is included, and what costs extra?
- How do we send hours and changes, and what is the deadline each pay period?
- Who will be our point of contact, and how quickly do you respond to queries?
- How do you handle corrections if something is wrong?
- Can you work with our existing time and attendance or HR systems?
- What reports will we receive?
- How do you protect our employees’ personal data?
- How would the move from our current arrangement be managed?
Protecting employee data
Payroll involves sensitive personal information, including bank details, PPS numbers and pay. When you outsource it, your provider processes that data on your behalf, so you should have a written agreement in place that sets out how it is handled, stored and protected, as required under GDPR.
Planning the handover
A good handover is mostly about preparation.
- Gather employee records, pay rates, deductions and year-to-date figures.
- Agree the process and deadlines for submitting hours and changes.
- Choose a start date that gives enough time to set everything up properly.
- Consider running one pay period in parallel with your current process to check the figures match.
- Tell employees about the change and who to contact with questions.
Measuring whether it is working
After a few pay periods, review how things are going. Are employees being paid accurately and on time? Are queries being answered quickly? Is your team spending less time on payroll than before? These are the measures that matter.
Payroll support from eFlexes
eFlexes provides payroll services alongside workforce administration, time and attendance, and financial administration support. Find out more about our payroll services or get in touch to talk about your requirements.
