Clients often ask us whether they should outsource payroll administration or handle it themselves. They also wonder about the legal requirements and complexities involved in payroll management. As a business owner, you’re obliged to maintain a payroll record, and you have the option to manage it in-house or outsource it to our specialists. Both options require software to set up your business’s payroll system. Managing payroll yourself has various pros and cons.
Pros of Managing Payroll Yourself:
- Cost savings as you handle most tasks independently.
- Flexibility to create your own schedule, free from reliance on an accountant or payroll specialist.
Cons of Managing Payroll Yourself:
- Your time is valuable, and managing payroll may not align with your strengths.
- Frequent changes in labor laws require you to stay informed to leverage advantages and avoid pitfalls.
- As you hire more employees, compliance with, for example, collective labor agreements (CAOs), becomes crucial to prevent issues among your staff.
Outsourcing Payroll Administration
If you’re contemplating outsourcing payroll administration, let’s explore the advantages and disadvantages.
Why Outsource Payroll Administration?
- Time is a significant saving as many tasks are handled on your behalf, allowing you to focus on your core competencies.
- Economies of scale in cost savings, as the service provider manages multiple clients.
- The process is structured, and the service adheres to a defined schedule for timely submissions to tax authorities.
Disadvantages of Outsourcing Payroll Administration:
- You acquire less personal knowledge compared to handling payroll in-house.
- Your reliance on others and the quality of their work may be a concern.
Outsource Payroll Administration to Practical Accounting
We’re here to help you make the right choice and demonstrate the additional benefits of outsourcing your payroll administration to us. We can also show you the costs of processing the payroll for a director-major shareholder (DGA) or multiple employees.
When you choose our office to manage your payroll administration, only a few monthly steps are necessary:
- You provide any potential changes to our staff every month. These changes may include employees taking leave, receiving pay raises, or leaving the company. You can submit this information digitally via a form or email.
- Our staff will verify and process these changes. Subsequently, the payroll run is completed at a fixed time, along with the tax return, which is then sent to the Tax and Customs Administration (Belastingdienst).
- You will receive a notification from us when the payslips are ready, allowing you to pay the salaries via SEPA, iDeal, or directly.
- Each employee receives their app, enabling them to view their details and, if necessary, download them.
- If desired, we can also maintain leave records and enable employees to submit their expense claims. You, as the business owner, can then approve these claims and include them in the same salary payment.
So, Should You Outsource Payroll Administration or Do It Yourself?
- Outsourcing your payroll administration saves you time and provides you with a single point of contact for your questions.
- Managing payroll in-house may be cheaper but beware of hidden costs.
- Outsourcing spares you the need to delve into complex labor laws.
- Doing it yourself consumes time (and thus money).
- Knowledge is vital, as no one wants tax authorities or the Employee Insurance Agency (UWV) to demand back payments and fines.
Want to Learn More About Outsourcing Payroll Administration or Doing It Yourself?
Our office is here to assist you. We have access to cutting-edge software applications, and our staff is ready to collaborate with you. We involve all users to provide optimal HR services, requiring minimal effort on your part as a business owner. If you use multiple systems, that’s not a problem, as our open API allows easy integration with existing and new applications. The costs for outsourcing payroll administration start at €15 per payslip, with lower rates for additional payslips. Choose the option that suits your business best and let us support your payroll needs.
Curious about how you, as an entrepreneur, can benefit optimally from the discussed topics? Read further in our blogs and discover the keys to current insight and solid financial management, where our office does more than just accounting. Whether it’s tax benefits, payroll administration, or optimizing your accounting, we have the insights you need. Contact our specialists today for a personal advisory session. Discover how we can help you optimize your financial strategies and achieve relational insight so you can steer based on facts rather than assumptions.
