Outsourced payroll and managed payroll are both methods of outsourcing payroll processing to a third-party service provider. These methods are often used by businesses to reduce costs, increase efficiency, and improve accuracy in their payroll processing activities. However, there are some differences between the two, some of which we have highlighted in this blog
Outsourced Payroll
Outsourced payroll is a comprehensive service where the third-party provider takes complete responsibility for all payroll-related activities. This includes processing payroll for employees, calculating and withholding payroll taxes, preparing and distributing employee wages and payslips, and ensuring compliance. In this scenario, the client company hands over all payroll-related tasks to the service provider and relies on them to handle everything efficiently and accurately. This type of service is typically ideal for small businesses or companies that have limited resources to manage payroll in-house, as well as companies that have to utilise complex payroll models.
Managed Payroll
Managed payroll, on the other hand, is a more customised service where the third-party provider provides support to the client company in payroll processing. This support may include providing software tools to manage payroll, such as payroll software platforms or time and attendance tracking systems. In this model, the client company retains some level of control over the payroll process, and the service provider is responsible for providing support services and resources to ensure that the payroll process runs smoothly. This type of service is typically ideal for larger companies or businesses that have more complex payroll needs and require more control over their payroll process.
In summary, while both outsourced payroll and managed payroll are outsourcing options for businesses to streamline their payroll processes, they differ in terms of the level of control and responsibility the client company retains over the payroll process. Businesses should carefully consider their payroll processing needs and the level of control required before choosing between these options.
At Bishop Oak, we offer a flexible outsourced payroll solution for businesses in a range of industries. We specialise in payroll outsourcing for construction and payroll outsourcing for recruitment agencies with the aim of increasing efficiency and ensuring compliance with all HRMC regulations. To find out more about the services we offer, please contact our team.
