Payroll Bureau vs Outsourcing

Have you recently started to look into outsourcing your payroll, spent hours sifting through different online payroll providers, and yet, you’re faced with the daunting business decision - Do I go with payroll bureau services or outsourcing services?

Well we have the guide for that, see below the difference between payroll bureau and payroll outsourcing from the experts at PayEscape and find what is right for your business.

What is payroll?

Firstly, if you’re new to this you may be still trying to get your head around what actually is payroll? Payroll is the management and ongoing maintenance of employee payment processes and taxes. Managed payroll services often reduce the risk of payroll mistakes as it ensures companies of all sizes are compliant with financial regulations and tax laws.

When using a payroll provider, there are three payroll routes you can take, cloud-based, on-premise and integrated systems:

Cloud-based

Payroll software that’s hosted in the cloud. Cloud-based software means your payroll can be accessed wherever, whenever. Businesses and employees can work from any location and have access to up-to-date information that’s safely and securely stored in the cloud. Since the pandemic and a rise in hybrid and remote work, this has become increasingly popular.

On-premise

On-premise payroll software is stored onsite on a local server or computer. On-site payroll software used to be the most popular type of payroll, but more and more companies are choosing to opt for cloud-based or integrated systems. There are hidden costs associated with on-premise software, such as warranties and hiring IT professionals to manage the system, undertake maintenance and monitor security and storage space.

Integrated systems

Integrated payroll software links up to other software, making data transfer easy and simple. When payroll systems are integrated, processes are automated which saves time, money and resources.

This type of system can also scale alongside a business. According to an article by Forbes, 65% of organisations prefer to deploy data integration solutions from cloud platforms or hybrid cloud, and 80% of enterprise Business Operations leaders say data integration is critical to ongoing operations. Choosing an integrated software makes the process a lot smoother for businesses.

What payroll services cover:

• Managed Payroll Software

• Enrolling Staff to software

• Sickness/Holiday or Maternity Cover

• Yearly Legislation Updates

• Hardware, including Backup Server

• Set up of new staff and P45s for those leaving

• Year-end administration services including P60 processing

• Deductions and calculations management

• Pension management

• Guaranteed on time and accurate processing

• Payroll process validation and monitoring

• Payroll Outsourcing

What is Outsourced Payroll?

Now that we’ve explained the basics of payroll, we can move onto outsourcing. Outsourced payroll is quite literally using a payroll provider, like us, to fully manage your entire payroll for your business, sometimes outsourced payroll is labeled fully managed payroll - but essentially they are the same thing. Outsourcing your payroll means your payroll is covered from start to finish from a third party supplier, from enrollment, staying compliant and paying your staff on time with legalities covered. Find out more on outsourcing in our outsourcing guide here.

What is a payroll bureau?

Payroll bureau is a 50/50 split. This means you are partly outsourcing your payroll to a payroll provider and partly working internally on your payroll. This allows you to manage certain areas that are important to you whilst having a team of outsourced experts manage the technical bits and having their support. As the payroll bureau handles these specific responsibilities, you’ll still need an in-house team to manage other internal payroll processes.

What is the difference between a payroll bureau and outsourcing payroll?

The payroll bureau handles specific parts of payroll processes you don’t want to handle internally for example; providing HMRC with information, processing payments & expenses, preparing payroll reports, and processing and sending out payslips. Whereas outsourcing payroll to a payroll provider means your payroll is completely taken care of by a specialist team.

Both payroll bureaus and fully outsourced payroll providers will provide expertise in all areas of payroll, including legislation and regulatory requirements like pensions auto-enrolment and RTI (real time information), and will be experienced in dealing with complex requirements to ensure your business remains compliant.

Below is a list of what both bureau and outsourcing offer for your business:

Payroll Processing

• Payroll processing in line with agreed timetable

• BACS transmissions for employees’ net pay and HMRC payments

• Set up of new staff and P45s for those leaving

• Year-end administration services including P60 processing

• Deductions and calculations management

• Pension management

• Guaranteed on time and accurate processing

• Payroll process validation and monitoring

• Complete payroll related tax service including automated tax filing with the HMRC

• Enrolling Staff to our software

  Access and reporting

• Cloud-based PayEscape payroll software

• Custom report building

• Access 24/7/365 from anyway and any device

• Real time payroll preview

• General ledger/finance system cost allocation reports integration with your accounting software

• Third-party BACS payment reports (unions/AEOs/Pensions etc.)

• Employee self-service: Update personal details and view online payslips

  Support

• Integration into other Accounting, Time, and HR software

• Platform training

• World Class Customer service

• Legislative updates

• Advice and guidance on payroll related queries including HMRC legislation

• Full implementation service

Outsourcing payroll with PayEscape would mean you have access to processing, reporting and reports, however If you still wanted to keep control over your payroll, opting for reporting or need support with specific payroll processes and functions, our payroll bureau service would be best for you and your business.

More than half (61%) of UK organisations now outsource part or all their processes to a third-party payroll bureau service, making it a popular choice for many businesses.

If you’re ready to take the next step and speak to an expert payroll provider then get in touch online here or book a free demo and check out our payroll software today.