Payroll is the function associated with actioning your employees’ remuneration packages in your agreed pay cycle. Whereas the wider HR function is responsible for variety of other areas like talent attraction and retention, employee benefits, employee training and development and much more.

Most businesses consider payroll to be a sub-function of their HR department. But since many companies do not have HR departments, Payroll is often a standalone function in these companies’ operations.

Outsourced payroll services mean that you hire a third-party company to take care of your payroll functions. This is particularly useful for:

• foreign companies who are unfamiliar with the local employment legislations and practices
• Local SMEs with a growing workforce but do not have HR and Payroll capabilities

By outsourcing to a reputable Singapore Payroll Services provider ensures your employees are paid correctly and on-time. You will also have peace of mind that your business stays compliant with local regulations around mandatory contributions.

While this will vary for each business, some of commonly voiced pros and cons of outsourcing payroll include:

Pros

• Outsourcing can be less costly than hiring fulltime staff
• Employees’ salary packages are kept confidential
• Employees are paid on time and your business will be fully compliant with local statutory requirements
• Employees’ personal taxes are filed in compliance with tax laws and regulations

Cons

• You could possibly be paying for services that your business doesn’t need
• You are putting highly sensitive payroll data in the hands of an external provider

Typically speaking, handling payroll in-house is more expensive than outsourcing payroll.

This is because employing an in-house expert can be costly. Aside from mitigating operational cost, outsourcing your payroll function can also reduce your capital expenditure on technology infrastructure (software, hardware, back-ups and maintenance).