• Danny Elbertsen

Outsourcing payroll? 6 reasons to do or not to do

The moment you hire your first employee is often a milestone.

Besides being a festive moment, it may also cause some extra worries. For example, from that point on you are obliged to keep a salary administration of the government. On the website of the Tax and Customs Administration you will find a step-by-step plan with how to set up a payroll administration in order to meet the tax requirements.

But do you want to do that yourself? Many entrepreneurs therefore also wonder: do I do the payroll administration myself, or do I outsource it?

Whether it is better to do the payroll administration yourself or to outsource it, depends on a number of factors. Do you have knowledge of payroll regulations? Do you have many or few staff? And do you dread the paperwork that goes with it or not?

Outsourcing payroll: why you want to choose this option

1. It saves you time

It may be obvious, but an administration office can save you a lot of time. If you do it yourself, you will soon spend a few hours a month paying your employees. You could of course also spend that time on other things.

2. You don't have to worry if everything is right

For many it will be a relief: by outsourcing the administration, how not to necessarily be aware of the legislation on payroll. These change quite often. A salary office is of course always up-to-date in that area.

An additional advantage is that you also reduce the risk of possible fines from the tax authorities. After all, you are relinquishing responsibility. Make clear in advance who is responsible for what.

3. You have support under the shortcut

If you pay an external party to do your payroll administration, this usually also includes support. If your employee has a question, this can be addressed directly to the payroll administrator.

Reasons not to outsource payroll administration:

1. When you want to save money

A payroll office costs you money. All together you will quickly lose several hundred euros per year. That's how it works: most parties charge a fixed price per payslip. This is often around ten euros, excluding VAT. In addition, start-up costs are added and the costs for every new employee you register.

2. You have less overview

It makes sense: the more tasks you outsource, the less you face yourself every month. If you like to regularly view your administration, you can opt for an office with an online system. This way you can always log in to see the status.

3. The responsibility lies elsewhere

It is a pros and cons of outsourcing your payroll administration: giving away the responsibility of an important administrative part of your company. So you want to find a party where you can rely on them to take care of the administration properly. That can be a time consuming job.

What role can software play?

Before you make a choice, it is good to know that there is a third option in addition to outsourcing or not. You can also do your payroll administration yourself with some help. For example, there are salary packages that help you with the salary process.

Of course you pay for the software, but the costs are lower than if you outsource the entire payroll administration. The perfect solution for entrepreneurs who do not want to do the entire administration themselves, but also do not want to pay the main price to outsource it.

Benefits software payroll

The advantage of this software is of course that you keep your payroll administration under your own management and are not dependent on a third party. But there are more benefits. This saves you a lot of time, because employees can make a leave request or submit a declaration themselves in the system. And when it is time for an evaluation meeting or contract extension, you will automatically receive a notification.

The chance of errors is also a lot smaller with this software. If you enter something incorrectly, the software will immediately issue an error message. Since the calculation of the salary is automated, the payment to your employees is also smooth and fast. In most cases you can link salary software to other solutions. Think of your accounting program or your time registration software.

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