Payroll Outsourcing

Time Savings / Productivity

Payroll processing inside your business is a time-consuming process. Keeping track of benefit deductions, garnishments, new hires and terminations, paid time off as well as SARS and labour law changes can be frustrating tasks. Each year significant labour hours are spent preparing tax documents and ensuring that they are sent out timely. Outsourcing payroll allows employers to concentrate on their core business and frees up the business owner, human resources or accounting personnel to work more on strategic tasks that could ultimately affect your bottom line. Regardless of the number of people employed by your business, attending to payroll demands a great deal of time and attention to detail. Pay period follows pay period, requiring the business owner to input critical amounts of data and double-checking for any keying errors- time taken away from tasks a small business owner must attend to.  (Like Customer Service)  Those repetitive tasks should not be hours taken away from a key management or owner’s daily productivity.  Outsourcing payroll immediately frees up precious time. Employers only need to make contact with their outsourced payroll specialist by approving time once each pay period.

Reduce costs

The direct costs of processing payroll can be greatly reduced by working with an outsourced payroll provider. Big businesses can afford to maintain robust payroll departments. However, Small/medium sized businesses, having an in-house payroll process is a money burner. If your business has fewer than 30 employees, there’s a very good chance that you can save money by outsourcing your payroll operations. Do the maths. Figure out how many labour hours your employees are devoting to payroll-related activities, (Calculating payroll each time period, printing, signing, and distributing salary slips, computer software and program maintenance, training and support, keeping up with changes in tax rates/laws, preparing and remitting payroll taxes and returns to SARS, garnishments, new hire reporting, generating reports for in-house and accountant use) calculate how much you’re spending and compare the amount to the plans offered by several payroll-services providers. You’ll probably be surprised by the result. When you consider the cost of an employee’s wages, and then add in benefits, that can really add up quickly. If you are the owner of a small to medium size company and you are trying to do payroll yourself or in-house, the cost of the time spent is even greater. If you outsource payroll, you don’t have to worry about your payroll processing company calling in sick, resigning, wanting to take a vacation OR wanting to request a possible maternity leave that you have to pay for. There’s also the matter of confidentiality when it comes to payroll. If an employee wants to “share” how much a fellow employee is making that can cause extreme drama in the workplace. A common response from several clients is, “It is much more efficient than if I asked mybookkeeper to handle it, or if I tried to handle it myself.”  Most accountants will also tell a business owner to outsource payroll.  Many of my referrals come from accountants who have just recommended the benefits of outsourcing payroll to their clients.

Avoid SARS penalties / Mistakes

SARS states, 40 present of small businesses paid penalties for late or incorrect filings and payments. Penalties for errors, omissions or late payroll tax filings can be very costly. Payroll mistakes are painful, angering employees and not reporting timely or accurately to SARS. Small business owners aren’t experts in the challenging world of government tax regulations. At the same time, they are legally responsible for any cases of misrepresentation or a failure to accurately report employment taxes to SARS. Mistakes lead to audits and penalties—situations no business wants or needs. Government rules and regulations are always changing and business owners can’t be expected to stay on top of these changes. Skytrax Payroll Services stays up to date with current rules, regulations and changes in tax rates. A good payroll-services provider is far less likely to make a serious error than your in-house staff.  Many outsourced payroll providers calculate payroll taxes, manage filings and payments and will assume the cost of penalties due to incorrect calculations or late payments so long as you provide the necessary information and funds on time. At Skytrax Payroll Services we are reputable outsourced payroll services that have staff dedicated to keeping up to date on all of the changes that could affect your payroll, ensuring that you stay in compliance.

Team of Experts

Most business owners and payroll related staff don’t have time to research and study constantly changing regulations, withholding rates, and government forms. By outsourcing payroll, a small business can take advantage of expertise that was previously available only to big companies.  The most valuable payroll companies have a team of experts who handle many areas of Human Resources and Payroll.  Some of those would be a benefits department that would handle the administration of benefits and deductions in the payroll system, workers compensation experts, who would administer the changing of class codes should a job change for an employee, human resource experts who would help in employee issues and HR strategy. Also, if your payroll service has the ability to offer a plan, that is an added benefits as those transactions are also involved in the payroll administration.   Make sure you engage a qualified team of experts who can administer all the aspects of your HR and payroll needs.

Enhanced Security

Payroll processing is a complex and potentially risky business operation. Even with long time trusted employees, there is always a risk of identity theft, embezzlement of funds, or tampering with company files for personal gain. There’s also an evident risk when using in-house payroll software: How safe and secure is payroll data on the company’s server or network? This very real question can consume a business owner’s energy and attention as well. Do you have the time and energy to closely supervise your business’s payroll for time and rate abuses and other unethical activities? Most payroll services have technologies that can spot and alert clients to various types of payroll fraud. Additionally, online payroll solutions offer a “safe haven” for your confidential payroll data. In addition to redundant backup and multiple server locations, a quality payroll provider invests in state-of-the-art systems for storing and protecting data, simply because it’s part of the service provided to clients.

Employee Access / Gaining a Human Resource Information system

Human Resource Information Systems have become one of the most important tools for many businesses. Even the small, 20-person office needs to realize the benefits of using Human Resource Information System to be more efficient. Many firms do not realize how much time and money they are wasting on manual human resource management tasks until they sit down and inventory their time.  It allows companies to cut costs and offer more information to employees in a faster and more efficient way. Below are some examples of how employers and employees gain access to HR Information:

Employers Gain ability to:

  • View Invoices and Payroll Reports
  • Access and Update Employee Information
  •  Enter New Employees
  •  Enter Time Reporting Information
  • Communicate with Employees
  •  Create Custom Reports
  • Track PTO ( Paid Time Off)
  • Upload Benefits Plans and Custom Benefits Documents
  •  Upload Employee Handbooks and other HR PDF’s
  •  Track Licenses / Certifications for Employees
  •  Performance Reviews
  • Training Records
  • Total Compensation Reports

Employees gain access to:

  • Review Checks
  • Review Benefit Information
  • Update Information
  • Any Corporate Documents 

Using the right payroll company with a Human Resource Information System allows small to medium sized business access to this platform without having the expense of buying and maintaining it, another large company benefit of outsourcing payroll.

Avoid Technology Advancement costs

A constant question for small business owners is whether they have the latest version of their payroll software and the most recent tax tables installed on their computer. Using the wrong tax tables can result in stiff penalties. Paying a maintenance fee and having to upgrade software is a fixed cost on-going.  Outsourcing payroll removes those costs / headaches and keeps payroll running smoothly.

Losing payroll expertise

Multi- tasking payroll responsibilities with an overworked office manager or accounting employee,  depending on a relative or spouse to run payroll,  whatever the situation, every business with in-house payroll runs the risk of receiving notice that your payroll person is taking an extended vacation, fell ill, took another job or not able to do payroll.   If your bookkeeper or controller gets a new job, they will walk out the door with their knowledge of the payroll process and how you do it. Outsourcing your payroll will assure retaining the knowledge of all the ins and outs of payroll-related tax laws.  It’s what payroll companies and experts are trained to do and part of the guaranteed service provided. Savings in time and money, greater data security and the comfort of knowing experts are handling your payroll functions are compelling reasons to explore the benefits of outsourcing. Your staff could try to achieve the same level of understanding, but it would take a large investment in time and effort. It’s what they’re trained to do and part of the guaranteed service they provide. With a payroll service, output speed and quality won’t vary in accordance with vacations and illnesses. You also won’t have to spend time helping new hires understand your business’s payroll system. If you experience turnover or inability to work for periods of time in your payroll area of your business, outsourcing payroll provides a framework to be able to train an employee to report hours and communicate the payroll data without experiencing the pain of a missing skillset of an expensive in house payroll professional. This one of the key benefits of outsourcing payroll.

Worry/Peace of Mind

With the help of a professional payroll service provider, the hassle and pain often associated with processing payroll is gone.  You provide the basic information, and your payroll company takes care of the rest. And with guarantees of error-free payroll and tax filings and payments, you can eliminate the worry that many experience when it comes to paying employees and taxes correctly and on time. There’s a lot to be said for the peace of mind that outsourcing payroll services can bring to a business owner or manager. No headaches, no hassles: You’re left to focus on running a profitable business. A clear focused mind is one of the true benefits of outsourcing payroll.

In Conclusion, when you encounter a business owner or manager who can identify with 1 or more of these 10 factors that prevent productivity and hinder profitability centred around the time and cost associated with administering your own payroll, one can usually find a business case to make the switch for outsourcing payroll.  These are the key benefits of outsourcing payroll.  Assuming the payroll provider does a quality job and serves the client, these outsourcing relationship become long standing business partnerships. Please contact Skytrax Accounting and Payroll Services on 066 234 3768 or email us

Why Outsource