Hiring a Payroll Manager
vs. Outsourcing Your Payroll

Are you paying a fee towards a recruitment company hiring for your payroll manager role? STOP what you’re doing!

Commission agencies get paid 15-20% based upon an average annual salary of £40,000 for a payroll manager. This means commissions get paid between £6000-£8000 per payroll manager that is hired through them. Why spend an average of £40,000 plus recruitment fees in hiring a payroll manager? By choosing to outsource your payroll, you will be cutting your money and time costs to your business. This will therefore allow you to spend more time on your business and using the money you’ve saved in expanding your team in other departments.

Payroll companies have multiples clients at one time and are constantly running different payrolls for different sized organisations. This means you can get your payroll completed without investing in a full time or part-time staff. The payroll manager, you possibly hire, could decide to quit their position within the recruitment rebate period (0-3 months).

As a business, you will not get your money back for that hire, which will therefore mean you will have to restart to hiring process again with your chosen recruitment agency. Around one in five employees, 22%, have left their job during or at the end of their probation period.

When comparing this to outsourcing your companies payroll to a payroll company, you will typically have a smaller pool of candidates to choose from. Therefore, this means you have fewer choices in terms of hiring a skilled and experienced payroll professional to do your payroll.

 Hiring means you agree to pay the employee a set wage for a set number of hours they have worked, regardless of whether there is work for them to do. That means there may be situations where you are paying your employees to twiddle their thumbs instead of actually doing work. This does not happen when you outsource your companies payroll to a payroll company as you pay for what you get.

Delay the decision of hiring a payroll manager and choose to outsource your payroll and get your payroll delivered immediately rather than wasting your time hiring a manager for your compay.

Payroll software can be used by business owners and payroll professionals, to calculate the amount that each employee needs to be paid, deductions and create payslips. But finding the right payroll software for your company can not only be time-consuming but will also add extra costs for your business.

Did you know that payroll software could cost you a minimum of £100 – £500 a month?

Finding software that suits your business, and your budget can be difficult. Payroll software comes with many benefits such as creating and submitting forms to HMRC, auto-enrolment, flexible scheduling, HR functions and lifetime history so you can view your past documentation. Hiring a payroll manager to use this software can be time-consuming as there is a possibility you may need to train your payroll manager on how to use the software. So why not outsource your payroll and focus on your business.

Trying to find software that contains all the functionality you want can be time-consuming; not just for you, but also for your payroll manager. Have you thought about what that time can be used for? Could there be something going on with your business that you think you should be focusing on? If so, do you think your payroll manager will be able to pick a good software to purchase? By outsourcing your payroll needs, you won’t have to worry about your time being used to find payroll software. Our payroll experts will be able to provide their service while using software they have researched to find the best possible software that can be used on any sized companies.

If you are either currently running your payroll in-house or if you are looking to run your payroll in-house, you’ll need software to help. By purchasing a certain type of payroll software you will have to pay a licensing fee every month or once a year for that piece of software. Depending on which software you are buying and what the software can do for this, you could potentially have more than one software cost for your company. Did you know an estimation of 95.5% of software has limitations of integrations such as submitting a holiday? This could mean you could have two lots of software costs being paid out rather than just one. Are you really saving money by keeping your payroll in-house? 

Aside from paying the initial licensing cost of the software, there may be an installation cost to install that piece of software. There are installation costs when buying software and some software costs could be dependent on the number of employees. This is down to having to pay a certain fee to pay to get that piece of software on different computers. By outsourcing your payroll, there won’t be an installation fee due to you will only be paying for us to run your companies payroll.

Would you give between £40,000 to £65,000 a year to charity? By hiring a payroll manager to only do your in-house payroll, this is what it may seem like. So why waste that money on someone who will be working for one week per month, where this money could be used on your business?

In most companies staff are paid weekly or monthly, but they still have the salary of the payroll manager even when they are not doing payrolls. Considering how many hours a payroll manager spends on working out and submitting your payroll, this can take half a day and a full salary is still paid. So what are your payroll managers doing for the rest of the month? Do you give your payroll managers extra work to cover up for their pay? Or do you pay them to spend their time doing their online shopping or have more than one lunch break?

Not only are you paying your payroll manager’s salary, but have you thought about the pension and NI contributions you have to pay monthly as well? For example, if your payroll manager has a yearly salary of £40,000.
£3860 per month / £46,320 per annum costs
£5,000 + £1,200 = £6,320
£6,320/12 = £3,860

By outsourcing your payroll, most businesses will be able to save the payroll manager salary, of £40,000 – £65,000, and possibly save more. While outsourcing your payroll out, you will only be paying a fraction of the amount you would have been paying the salary per month and will be having more money available to use on your business. So by paying us to do your payroll, you are paying for our time to do your payroll and nothing more. 

Businesses look at the time they have and what they can put their money into. Hiring a payroll manager is not what businesses do today, they rather outsource, knowing that everything is up-to-date and no errors will be made.

There are different queries your employees may have in regards to their employees may have about their payslips. But have you thought about the time that is being wasted by your payroll team answer the enquiries that are coming in about it? Spending time on customer queries can be time-consuming for a payroll administrator, but also for the business.

Why deal with staff queries when you have a business to run?

Outsourcing your payroll is best for your business, why? Errors are not made, everyone is getting paid on time and if there are any queries to deal with, well, that’s what they are there for. Employees have many problems that they face with their pay. Some have many questions that they would like to be answered such as:

·         What is my holiday pay?

·         Why is my tax code different from last month?

·         Who can I speak to resolve my pay as I have been paid wrong?

When hiring a payroll manage, depending on the training they have received in regards to how to run a payroll or how to use the payroll software, many errors could potentially be made. When this occurs, no notification could pop up saying this is currently happening and this can cause many problems inside the business. In-house payroll expertise is not always sufficient and can be tricky to deal with especially not being updated. Staff queries will always occur within a payroll matter. Businesses need to also be clear on how in-house payroll calculate their pay. Some many deductions and payslips need to be calculated, which cannot be wrong.

These include:

·         Pensions

·         NI contributions

·         Benefit schemes (e.g. cycle-to-work scheme)

Businesses now, rather outsource their payroll, keeping them updated and knowing that they are doing everything correctly. Why hire a payroll manager and waste money when you can be saving that. Outsourcing your payroll, business save what they are paying for a payroll manager yearly. Payroll providers deal with staff queries, so businesses do not have to do the work for them.

Are you sure your payroll team are answering all of the queries that are coming in? Are queries occurring frequently? If so, can you say that your payroll team are working in a way that isn’t causing mistakes to occur in the payroll?

On average, 43% of employees all over the world have questions and concerns about how they are getting paid or if they have any problems with their payslips. Whether they are expecting more or less, incorrect or anticipated amounts can lead to distress for an employee.

Here are some questions employees may ask:

·         How will I get set up?

·         How does your service handle payroll taxes?

·         My payslip is incorrect?

·         Why have I been given this tax code?

·         What is the process to start giving pension contributions?

·         What other benefits schemes are there for me to opt-in to?

·         Why have I been paid less than expected?

Did you know having an in-house payroll team may not be the right thing for your business? This could be down to two factors. One factor is your payroll manager and team are not keeping up to date on the changes of legislation that are affecting your employees. This could the change of the tax-free allowance or addition or change to the benefits schemes (e.g. cycle-to-work scheme) your employees could opt-in for. Another factor is the communication between your payroll team and the other company employees. This could mean that your payroll team are not updating your employees when there is a change (e.g. change of tax code) that could affect their monthly income.

Many businesses outsource their payroll as there is less stress and also they can focus on the business. 51% of employees can lose trust in their employer especially with in-house payroll teams and not being notified of the problems that are being caused.

As a business owner, dealing with the HMRC is something you will need to do for different reasons. But did you know by outsourcing your payroll, your payroll company could contact them on behalf of you?

As a small-to-medium or enterprise-sized business, there are a lot of different deadlines you may have in regards to the HMRC. Why should you deal with the addition of the payroll work and deadlines on top of running your business? Did you know that small or medium-sized businesses are more worried to make errors in payroll matters, which therefore resulting in them paying hefty penalties?

By outsourcing your payroll out, you won’t have to deal with the HMRC, your payroll company can do it on behalf of you and will contact you with updates on what is happening with it. We will be able to pay HMRC all of the NI contributions and deal with any enquires you or your employees may have.

 How payroll outsourcing can help:

Ensuring deadlines are met

Outsourcing your payroll can mean that you do not have to keep up with the HMRC, we can do that for you. HMRC deadlines can either change or stay the same. Businesses are focused on bringing in money but are forgetting what is going on within the business. This is why we are here to help. Happie Group makes sure that all HMRC queries are taken care of and keep businesses in the loop. Hiring a payroll manager is more hassle and if any errors occur you will need to fix them.

Expertise

HMRC requirements are continually changing with more obligations on the employer, with Real-Time Information (RTI) and Auto-Enrolment being the recent examples. Small or medium business owners simply cannot be expected to keep abreast of all of the changes. Instead, using a third party such as Happie Group.

Payroll is a major business process that requires a dedicated staff to complete, but most small businesses usually use unqualified employees to conduct these tasks as an additional function besides their originally assigned responsibilities. By hiring, staff members who either have some experience with certain software or payroll experience may mean you will need to provide ongoing training for them so they are able to complete their payroll duties without any errors. How much time and money are you willing to spend to allow this to occur?

Businesses do not want to spend time training someone for payroll management when they rather hire someone who is able to conduct this job without a hitch. Most businesses recommend outsourcing their payroll. When businesses decide to outsource payroll, they allow their staff to concentrate on their originally assigned tasks, improving efficiency in the workplace. Therefore, having a third party handling a company’s payroll process will allow everyone to focus on their areas of expertise thus making the business grow.

Aside from training your employees, there are many other things your employees will need to be trained on. Payroll is more than just paying in time to employees. There are different forms of employment that can lead to complex payroll situations that your “in-house” payroll staff may not be familiar with, and have a lack of knowledge with payroll procedures which may result in serious fines and fees from HMRC. Outsourcing payroll services will provide a vast knowledge of everything related to payroll, tax law and new government legislation.

By having to train employees to keep themselves updated with new processes and sudden legislation and payroll law changes could not only cost you time but can also cost you money. But this isn’t just for your employee’s training, this includes yours as well. By spending time focusing on your training and keeping up to date with changes to the legislation, you are also losing time on when you can make money for your business.

Would you rather spend a small fee and get the payroll done without the hassle of providing training to your staff in regards to payroll and keeping up to date with recent changes to legislation? Why risk it? Most companies around the world outsource their payroll so there aren’t any mistakes or errors when processing.

There are many benefits to why you should consider outsourcing your PAYE payroll to a payroll company, from saving time to it being cost-effective. However, why should you? How does it affect you as a business? Here is all you need to know about why you should.

·         Save an average of £35,000 per annum

·         Make sure all of the payslips are 100% accurate every month

·         Saves you time so you can focus on your business

·         We can contact HMRC on your behalf for any queries

Managing the payroll in-house often requires an individual, or a team, with a thorough knowledge of the workings of the PAYE tax system. If your business does not have these skills in-house, you can organise your payroll by outsourcing it to Happie Group.

There are many benefits as to why you should outsource your payroll:

Why pay for payroll software, when you can outsource to us.

·         Free up precious time to focus on your core business

·         Reduce the need for training in-house payroll staff

·         Remove the expense of buying and maintaining a costly payroll system

·         Minimise the chance for errors, omissions or late payroll tax filings

Stay compliant with your tax obligations and PAYE responsibilities