Payroll outsourcing is very popular in India among small and medium-sized enterprises. The proven benefits of payroll outsourcing have resulted in small businesses turning to experts to manage their payroll allowing their businesses to be more profitable in the long run.  A recent study by the Economic Times found that by outsourcing the payroll services, small businesses saved up to 35% of their business costs. This makes payroll management one compelling reason for companies to consider for outsourcing this process entirely.  Payroll Outsourcing in India   Nevertheless, payroll outsourcing for small businesses does come with its set of challenges. If not done right, it can cost a small business significantly.  If you are looking for assistance to manage your payroll in-house and are considering outsourcing, here are five points to keep in mind.

1. Cost Calculations

For most small businesses, the cost of outsourcing their payroll process will be a major factor in their decision-making process. The first thing to figure out is how much your payroll management budget is going to be. Look for payroll companies that fit your budget once you have determined it. If you find a company whose asking price is a little over your remuneration capability but fits your payroll requirements, try and negotiate a deal with them. It’s important that you look for any hidden costs involved that might possibly exceed your budget.

2. Customer Support

If your small business runs 24/7, then so should your payroll company. While searching for a payroll company, look for companies that provide customer support in line with your working hours. Questions or issues related to salaries can come up at any point, so it’s crucial that they are tended to in time. It’s also a good idea to have dedicated support to avoid long waiting times and hassles of explaining your current situation every time you speak to a new customer support person. 

3. Protocols for Data Integrity

With data breaches on the rise, sharing sensitive data with third-party vendors is a point of contention for small businesses looking to outsource their payroll process. Security is vital when dealing with sensitive data and your payroll company should have significant security features in place. Make sure you are thorough in seeing that your data is securely stored and is not susceptible to theft. Some questions to ask your payroll company would be about daily back-ups and redundancy mechanisms in place to avoid interruptions.

4. Payroll Error Calculation

Payroll errors are notoriously common and need to be checked while payroll outsourcing for small businesses in India. Changes in tax regulations and complicated salary structures increase the likelihood of erroneous calculations. These errors can cost a small business dearly in the form of penalties and fines at the end of the year. Although most payroll companies promise zero error calculations, you should really test the waters to see if they stand by their claim. Look for payroll companies that are willing to pay for their own mistakes (instead of passing it onto you). Remember: if it’s their money on the line they will most likely do things right the first time itself.

5. Add-on Services

Most payroll companies provide additional HR services with their offerings. It pays to ask if there are any additional HR services that will help in daily operations and growth of your business. Income tax returns filing, temporary staffing, statutory compliance and leaves management are some examples of add-on services that you can avail from a payroll company. Keep in mind that these services may come at a cost, so find out how much extra you will have to pay eventually to use these services.

Final Thoughts

There are a lot of things to consider before choosing a payroll partner. Like most things in life, it pays to research and spend time to go through multiple companies before you choose the right one. This will ensure that in the long run, you will be happy with a payroll partner that meets all your payroll needs and more. 

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CA. Vipul Gandhi

Associate Director

Khandhar Mehta & Shah - Chartered Accountants

‘Paysquare’ a perfect match for us as a consultant to deliver the best to our client. It extends User friendly portal for Employees and seamless processing of Payroll including statutory compliance on time! We

Parameshwer Matla

Human Resources

Columbus India

‘Paysquare’ a perfect match for us as a consultant to deliver the best to our client. It extends User friendly portal for Employees and seamless processing of Payroll including statutory compliance on The most valuable service that we get from you is "peace of mind." I know that once I submit our payroll information, everything will happen on time, payroll, pay slips, statutory reports, full and final settlement, returns and I know that we are and will be always in compliance with statutory laws regarding payroll.

Ramakrishna Dabbara

Sr. Manager – Finance

Sumtotal Systems

We would like to take this opportunity to thank you for your continual support till date! Your support especially during this pandemic has been awesome! Be it the TAT (turnaround time) you people are processing our requests, being accommodative in accepting the II, III payroll revisions, working late/ weekends, delivering the reports in time and minimal to zero errors are some of the examples of your commitment towards work & deliverables.

Abhijeet Shete

SENIOR MANAGER- HUMAN RESOURCE

Altra Industrial Motion India

We would like to take this opportunity to thank you for your continual support till date! Your support especially during this pandemic has been awesome! Be it the TAT (turnaround time) you people are processing our requests, being accommodative in accepting the II, III payroll revisions, working late/ weekends, delivering the reports in time and minimal to zero errors are some of the examples of your commitment towards work & deliverables.

Sukesh Baban Dhage

Manager Accounts

Hi Tech BioSciences India Private Limited

On behalf of Hitech Bio Sciences India Pvt. Ltd., Hi Tech Bio Laboratories, Hi Tech Analytical Works & Hi Tech Biosynth Pvt. Ltd., we appreciate your dedication to provide Payroll services to our companies from the approximately last 4 years. We acknowledge the fact that due to COVID-19, situation has become really tough across the globe. We all are forced to stay at our homes and take extra care of ourselves along with family members. It is a privilege to acknowledge you and your consultancy’s efforts and recognize the valuable service that you have provided to us. 

It is always gratifying to work with such great people with extraordinary abilities to provide good and quality service. The kind of response from your side get is fabulous and most memorable with professional culture. Specifically we would like to mention that, your approach towards the client is fantastic, for e.g. response to email is very prompt, continuous touch with client, on time response to queries or questioners’, on time and accurate report sharing. Flexibility to client requirement, Client / customer centric approach etc. Timely payment of salary gives a lot of confidence to all employees and it is due to our partners like Paysquare that Hi tech has never defaulted on its commitment of timely payment of salaries.

Ratnakar Dhakad

Senior Operation Manager

Tecknack Technologies Private Limited

We are very impressed with Paysquare team due to their ability to process payroll very efficiently. We found the implementation team very knowledgeable, supportive and very systematic.

Paysquare is a very matured payroll processing solution and they have well paid down processes to manage first time as well as every month's processing.

Monica Shah

HR Business Partner India

Victaulic Piping Products India Private Limited

Honestly , It has been an amazing experience working with Payroll team as on date . Deepika and Uma has been a strong support to us. They have always been very helpful and co-operative. I congratulate them to run payroll with zero error every month. And I expect the same level of support in future. I am happy to be associated with Payroll team.

Seagate India

Manager

I have been a client of Paysquare for 7 years and their services are fantastic. Migration from the old consultant to Paysquare was seamless. Soon after the migration, Paysquare team was up the learning curve. They never missed the deadlines provided by us. The team is always reachable, and they keep us informed about changes in taxes or government policies which impact payroll. I have complete confidence and trust in their payroll solutions, and we will always recommend them. Any company looking to ease their payroll burden with friendly service and a flexible, secure system should partner with Paysquare.