Should You Outsource Your Payroll?

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If your small business is growing (and let’s face it, that is the goal), at some point you may want to consider outsourcing your payroll instead of worrying about paychecks, deductions and reporting.

In addition to handling issues like direct deposit, check printing, withholding and time and attendance, payroll services are typically well versed in state, local and federal tax laws and regulations. That kind of expertise can save your business a lot of time and headaches, particularly if your person handling those matters isn’t an expert.

There are a number of such services that cater to the smallest businesses, so the cost doesn’t have to be prohibitive. And as IRS penalties for payroll tax errors can be steep, it might make sense to outsource this function even if you have time to do it yourself.

As an entrepreneur, your time is best spent growing your company, not worrying about the complications that arise from growth. And that might be the best reason of all for considering a payroll service.

Adapted from Should You Hire a Small Business Payroll Service? at Small Business Computing.


The business I work for started out very small and has grown considerably in the past three years. Because of this growth, we now use a payroll service online. It helps us organize our own finances so that the company doesn't have to. I really like it, and I'm sure it saves our CEO a lot of precious time.


I think that anytime a business owner can put more focus into growing his business and reduce the amount of hours he puts into monotonous work is always a plus. Personally, if I were a business owner I would like to avoid dealing with the monthly tax deductions once I had the pay scale set.