Why should payroll be outsourced?

Ideally you should focus on your core business, that’s solving for your clients and ultimately looking after your bottom line. Payroll outsourcing is a specialist process that you should leave to the professionals. Outsourcing ensures that you remain compliant at all times and that you look after your most valuable asset which is your employees. Thus, you ensure that they are paid correctly and on time.

Outsourced payroll would basically include the processing of payroll data, master data changes, the processing of the salaries and wages- whether that’s on a weekly, or monthly basis, the generation of IRP5’s, payslips, reporting on these payrolls, and it might even include the actual disbursements of salaries and payments to third parties.

From our perspective, neither. Traditionally the payroll processing function has been linked to the HR department, we’ve even found that in some companies the Financial Manager is responsible for this role. Ultimately, it can end up in disastrous results. Payroll processing is a specialist function and should ideally be handled by the professionals.

This depends on whom you entrust with this critical function within your business. Our solutions are cloud-based, and are backed up on a daily, weekly and monthly basis. We also in conjunction with the client, setup a two-tier approval process, and the outsourcing process naturally creates that separation of duties between processing of the data, the approval of final salaries and wages, and the actual payment and disbursement of those salaries to individuals.

This varies in the industry from service provider to service provider. Some service providers have a minimum fee, however typically the fee ranges from R60 – R120 either per headcount or employee per month, or per payslip generated for that month. Service providers might also charge you for additional services, which might include employee self-service where an employee has got the opportunity to manage their own leave, generate their own payslips, or to the actual disbursement of fees where the service provider will pay your employees on your behalf, and make disbursements to the local authorities.