What Percentage of Companies Outsource Payroll?

The Milestone Team December 20, 2022
What Percentage of Companies Outsource Payroll?

It is well known that small businesses can spend several hours a week running payroll internally and spend hundreds of dollars a month on payroll, so many of them outsource payroll services as a way to save time and money. According to the National Small Business Association, 45% of small businesses outsource payroll.

How Do Companies Outsource Payroll?

Outsourced payroll involves delegating all or part of a business’s payroll operations to a third party. Along with payroll management, full-service providers assist with tax reporting, regulatory compliance, data security, and unemployment claims.

Employe Engagement Through Payroll

Which departments have the biggest impact on the engagement and satisfaction of employees? If you said HR and operations, you’re right on the mark. But when it comes to employee engagement, few executives think of a third department: payroll. But payroll is very important to employee satisfaction.

Almost half of the American workforce will start a job search after experiencing only two problems with their paychecks, according to the Workforce Institute at Kronos Incorporated. There can be no doubt that this statistic shows the fragility of employee engagement when employers fail to fulfill their core business functions.

Employees are entitled to fair, accurate, and on-time payment for the work they have performed. It can quickly undermine not just engagement, but retention, if you fail to process payroll correctly every pay cycle. 

List of Payroll Companies in USA

A good payroll software makes accurate payroll simpler. Here is a list of a few of the most popular payroll companies in the USA that assist small and large businesses with performing payroll correctly, maintaining compliance, and fostering employee satisfaction.

  • ADP
  • Gusto
  • Paychex
  • SurePayroll
  • Intuit Quickbooks
  • OnPay
  • Square

What Are the Signs You Need Help with Payroll?

It is extremely challenging to run a business. It may be overwhelming to handle many different tasks at once. However, these things can be easily managed with strategic decision-making and smart delegation. Among these responsibilities is managing the payroll process. Consider these signs to determine if you need help with your payroll or if you can handle it yourself.


It only takes a small payroll error to cause a huge financial mistake for a company. As a business owner with so many responsibilities on your plate, you might not focus on payroll as much as you should. Employees who have had paycheck errors may feel demotivated toward working for your company and may even leave. Such errors can be avoided by appointing someone whose job it is to ensure that everyone is paid correctly. Delegating this responsibility to an outsourced accountant will decrease the chances of expensive mistakes.

Save Time

It can be difficult to keep track of the wages each employee in your company has earned. Calculating their net pay can be time-consuming. The process will take even longer if you have many employees. Hiring a professional outsourced payroll service to carry out these tasks or using payroll software will save time.

Delayed Salaries

Your employees not getting paid on time is one of the most obvious signs that you need payroll help. Many Americans agree that they would suffer financial hardship if they were not paid on time. Salaries are an employee’s sole source of income. Paying for rent, groceries, and other bills with their salaries is a necessity. The delay in the payment of employee salaries is one of the major reasons why employees leave their current companies and move to another.

Maintaining Your Reputation

A company has to ensure that every payroll activity is in compliance with tax laws and employment laws. In addition, it is required to comply with the financial obligations of the company. Your reputation as a stable employer will be enhanced if you efficiently and effectively meet your tax obligations. Being a stable employer will allow you to hire the most qualified and talented employees for your company.

Ensure Data Security

The need to safeguard your data, which contains personal information about your employees, such as their date of birth, bank account information, mailing address, social security number, and so on, is imperative. When you use high-quality payroll software, your organization’s payroll information will remain secure.

How Milestone Simplifies Payroll for Small Businesses

There are many signs that need to be considered while analyzing if you should outsource payroll as a small business owner. Most employees depend on their paychecks every month to make ends meet. Therefore, it is necessary to always give correct compensation to your employees on time. When it comes to payroll, experience matters, and Milestone has it. Our small business payroll service experts will use the right tools and simplify the process to save you time and money and ensure success. Contact us today.

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