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Human resources

5 myths about outsourcing payroll management

March 29, 2023

For many business owners, payroll management seems like a never-ending obstacle course! Navigating deadlines and legal requirements is no picnic. That's why handing the responsibility over to the professionals can really help your business. Here are the top 5 reasons why businesses don't outsource payroll management—and why they should.

1. It's too expensive

No business is too small (or too big) to use a payroll service. The cost is scaled to the size of your business and your specific needs. It can even make sense for a micro business with just one employee!

There's a simulator to give you an idea of how much this kind of service costs. Just think about all the time you'll save, and the benefits for your business and the return on investment from outsourcing your payroll management will soon make sense.

2. It's too complicated

Any time is a good time to call in the professionals. A payroll service will step in at any stage of the process, wherever your business is at. There are different options to help lighten your administrative workload, including automating recurring tasks and simplifying processes. You'll also have a team of specialists to turn to for support whenever you need it.

3. You'll find the time

All the time you spend managing your payroll is time you could be using to grow your business, flex your expertise, develop sales strategies or turn your focus to anything else that increases profitability.

When tax season comes around, you need to create T4 (and R1 in Quebec) slips and federal and provincial summaries for your employees. And that still doesn't get you off the hook for the rest of the year, when you're juggling things like payments, source deductions, employee benefits, tax paperwork and records of employment.

Outsourcing your payroll management can reduce the risk of error when you're trying to follow regulatory requirements, and it can free up admin time for other—more central and income-generating—aspects of your business.

4. There's no point outsourcing something you can do in-house

Payroll data and the personal information of your employees is sensitive and highly confidential. Putting best practices in place to make sure you protect that information isn't always easy.

When you outsource payroll management, the professionals take care of the tough stuff. It's their job to make sure all the right legal and regulatory boxes are checked. That means you can stop worrying about financial penalties in case your numbers don't match up with the latest government requirements.

When you bring in the professionals, it shows your employees that you respect their work and you care about their wellness.

5. Your own payroll system is good enough

What happens if there's an emergency or you get sick? Do you have a plan B in case you can't handle payroll the way you usually do? Are your employees going to get paid on time?

Obviously, no one wants to think about the worst-case scenario. But it's crucial for your employees to get paid. Payroll management professionals use secure servers, conduct operations from multiple locations and keep regular, secure backups to minimize the risk of data loss and payroll delays.

To get payroll support for your business, contact a Desjardins Business advisor.