Payroll is one of the most critical aspects of every business which brings in fair share of complexity as well. While outsourcing is an efficient solution, its cost remains the biggest concern. Here is an overarching breakdown of the payroll outsourcing cost, including:
- Pricing structure
- Escalating factors
- Saving methods
Payroll is among the most crucial and complex functions for every business. Dealing with legislative requirements, taxes, multiple employee types, overtime, and numerous other variables, can make it quite challenging for growing organizations. Consequently, payroll outsourcing becomes an obvious choice.
However, before engaging with these services, a thorough cost-benefit analysis and understanding of the influencing factors are imperative. This article elaborates on cost components and structure to help you make an informed decision.
The typical payroll pricing structure
Different payroll service companies will charge you differently. While their cost computation approaches vary, the following are three common structures.
- Per-frequency approach is suitable for businesses with predictable payrolls. Payroll companies will charge based on how often you pay. The charges often include base fees and fees per employee.
- Per employee per month is an excellent option for companies having multiple pay runs for commissions, bonuses, and more. You pay for each paid employee only once a month, regardless of the payout frequency.
- Fixed pricing is suitable for small companies with stable employee counts. You need to pay a fixed monthly amount, covering the employee count. Some payroll solutions can limit the number of employees you include.
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