How much is your payroll really costing you?
Undoubtedly payroll is a fundamental part of every business – let’s face it, if employees aren’t being paid, they’re not going to work.
While payroll is crucial it’s also incredibly complex as you need to keep on top of new legislation, manage ever-changing processes and ensure correct calculations.
For those struggling with payroll or simply looking to get rid of the burden, outsourcing solutions are available.
But often the general consensus is that outsourcing payroll will be too expensive.
However, outsourcing payroll is ultimately cheaper than in-house because of the various factors that are often overlooked when calculating the true cost.
These factors include:
1) Software license
When discussing the investment required for in-house payroll, probably the most obvious cost that you need to take into account is the software required.
2) IT equipment
As well as software, IT equipment such as PCs, printers and servers need to be considered as the cost can slip past a lot of businesses when thinking about payroll.
Payroll is always changing with new processes and legislation being introduced rapidly, so you must think about the cost required to upskill yourself and your team.
4) Document printing and posting
When calculated over an annual basis the cost and time required to print and post payslips every month can amount to quite a lot.
5) The time required
The saying ‘time is money’ may be a cliché but it holds true in a lot of cases.
Often a forgotten cost is the time it takes each month to run your payroll which could instead be put into other business-critical tasks.
Especially when you’re required to manage time-consuming processes such as payroll year end, pensions and Holiday Pay.
6) Managing errors
Human error can be inevitable, especially when payroll isn’t your dedicated responsibility or if you’re managing a large number of employees.
Not only is there a cost associated with the time required to correct errors, but you must also be aware of the potential damage to your relationship with employees.
A recent study from CIPP found that 21% of people would change jobs after being paid either incorrectly or late.
Calculating the total investment required for in-house payroll
The above points are just a few of the key considerations you need to make when calculating the overall cost of your in-house payroll.
You can download our handy factsheet that can help you further and more accurately deduce your total investment in both cost and time.
If the above has made you consider outsourcing your payroll, check out our IRIS Managed Payroll service here and get your personalised quote – it might cost a lot less than you thought.
Also, we recently published a Q&A with our Managed Payroll team which looks at the support they’re providing throughout the COVID-19 pandemic, check it out here.