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Top 5 Payroll Outsourcing Tips for Startups


Starting a business and making it profitable is hard, but managing the payroll processes is overwhelming. In these conditions, payroll outsourcing services turn out to be a major game-changer.

Payroll processing is among the most time-consuming processes of an organization. And if you plan to do all the payroll management on your own, there are few points that you must consider.

According to research conducted by Paychex, payroll processing consumes about 11 hours per week. This means outsourcing your payroll will give you about 11 more productive hours per week. That’s 572 more working hours per year.

Time is of great essence for all businesses, but it’s even more crucial for startups. If you are thinking about outsourcing your payroll to a payroll management company, read along…

Here are the top 5 payroll outsourcing tips for startups:

1. Ensure Accurate Payroll Processing

Payroll processing mistakes happen, but you must minimize them. From an employee getting a short paycheck to erroneous tax payments, there are many risks involved with payroll miscalculations.

Miscalculated paychecks lead to penalties by financial institutions. On top of that, wrong payment calculation also affects employee morale. Paycheck issues have been one of the leading causes of employee grievances.

A long story short, payroll errors can lead to any kind of trouble, and they can cost you legal & financial troubles as well as loss of employees. As a result,  it’s imperative for you to choose a payroll outsourcing firm with a profound track record. A reliable payroll management company is one that is known for consistently accurate payroll processing.

2. Evaluate Industry Experience

Payroll companies work with businesses of all industries, verticals, and sizes. For example, as a startup, you may not have a lot of employees on board. However, you end up with a payroll outsourcing company that is an expert in working with large-scale enterprises and doesn’t have much experience in handling startup payroll processes.

You two won’t make a great team because companies that work with exclusively large-scale industries won’t take your task. And even if they do, you may not be their top priority. On top of that, you may end up paying more than what you get.

Moreover, it’s not always about the size of the company. The payroll outsourcing services provider you choose must have experience in your industry. This way, they’ll know your niche-specific requirements and give you a better-focused payroll service plan.

3. Analyze Scalability

Just like your business, your payroll process will also scale up eventually. And with that, you’ll have more payroll processes and responsibilities to handle.

Your chosen payroll outsourcing company should be able to accommodate the growing stages of your payroll processes. Suppose you started with a small number of employees and you hire a payroll processing company. Things are going the way you want them to.

Now, your business starts growing and you have more employees on board. And suddenly, your chosen payroll processing company isn’t able to scale its services as per your requirements. As a result, you end up looking for another payroll management firm and the circle never ends.

But that doesn’t make sense, right? It will lead to looking for a new payroll company every now and then. So, it would be better if you look for scalability beforehand.

4. Check Price and Contract Length

You are the best judge of how much money you can afford to pay. No matter how much ROI a payroll processing company promises, if it doesn’t suit our budget, it doesn’t suit your budget.

Check if your chosen payroll processing company charges a flat fee or on a per-employee basis. This way, you’ll figure out how much money you’ll need to shell out.

As far as the contract length is concerned, you’ll need to see how things turn out for you. We recommend going for monthly contracts to see how things work for you.

5. See who Your Point of Contact will be

Just like buying a new gadget or using new software, using a new service also brings along a plethora of questions. You’ll also come across many questions and doubts at various stages. As a result, you’d want someone who is familiar with your journey with the company and has all your records at hand as and when required.

For this, the payroll outsourcing company must provide a dedicated point of contact to you. This will help in streamlining the support line. It will minimize your waiting time.


The primary concern of a startup owner is to create and grab growth opportunities. And thus, spending time, effort, and money on scaling it up. These are the times when you need to let the experts do the non-core HR tasks. Choose the right payroll outsourcing services provider to handle your payroll.

You need to find a versatile payroll outsourcing firm that handles complete payroll solutions. Your trusted payroll outsourcing company should be able to:

  • Compute salary accurately
  • Help you stay compliant with all the local, state, and national employment rule & regulations
  • File taxes accurately and on-time
  • Process final settlements accurately
  • Handle reimbursements
  • Offer you a helpdesk with a dedicated point of contact
  • Create a comprehensive report on a routine basis

Only then will you be able to focus more on your business.


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