Your small but mighty business has been growing and now you’re faced with a choice: continue managing payroll yourself, maybe with the help of a part timer. Or outsource. You're hands-on with your business and think you can manage it yourself. It does mean extra work in the short-term, but you're convinced it's a more cost-effective solution. Here’s why the opposite is true.
Payroll software only takes care of so much: are you ready to be the tech liaison?
What happens when you can’t work out how to configure settings, update your payroll software or if there is an outage?
This is especially significant when major shake ups come around, like the one we saw with PayDay Super and the closure of the ATO clearing house
What about compliance? Yep, you’ll be playing compliance officer too!
Remember payroll isn’t just cutting cheques, managing it yourself will include the accounting & compliance components around:
- Withholding: Deducting Pay As You Go (PAYG) tax from employee wages and report it to the ATO.
- Superannuation: Working out what the compulsory super contributions is for eligible workers and ensure that reaches employees’ super funds within 7 days.
- STP reporting: Reporting tax and payroll details every pay cycle using Single Touch Payroll (STP).
- Leave and entitlements: Tracking and paying annual leave, sick leave, and other benefits if you have employees.
Not to mention the possibility of making costly mistakes that get you red-flagged by the ATO and attract fines and penalties.
A payroll specialist, on the other hand, knows the ins and outs of taxes, overtimes, contributions, sales commissions, and bonuses. So, the risk of mistakes and audits is lower.
Hiring a part-timer for a few hours instead? It still means recruiting, training, supervising, and more…
Hiring means recruitment, onboarding, leave, sick days, training, supervision, payroll cover and eventually replacement. All of these have associated costs.
With an outsourced payroll function, you’re buying an outcome, rather than building the solution from scratch. And that in itself is value.
There is also a case for when the reason to outsource is a structural one and goes well beyond costs. When it’s a single person looking after the payroll, it can represent a dangerous single point of failure. Because what happens to your payroll if the one person who knows how to run it isn't there?
At the end of the day, doing payroll yourself means you’re doing less of something else
All the time spent configuring awards, tax tables especially for part-timers and contractors who have different rules—that’s time you could be spending on negotiating deals with vendors, reviewing supply chain risks, adjusting your goals, or rethinking marketing.
In summary: Payroll is complex...
Payroll is a multifaceted and highly complex function with lots of the ins and outs and technical, technological and compliance considerations.
Managing it in-house whilst juggling other priorities is challenging because requirements may change faster than suitable internal infrastructure can be built.
At the end of the day what you need is for payroll to be handled properly, but basing decisions on cost-savings ends up, ironically, creating all sorts of trouble: from technology issues to compliance risks.
This is where outsourcing can offer capacity + continuity + specialist knowledge + risk management + convenience which all equate to outcomes. And that's a different cost calculation altogether.
Let us manage your payroll for you
At Azure Group we manage your employee’s needs from engagement to termination – ensuring all information is held in the strictest confidence. We utilise Australian standard software with the latest tax tables and keep you abreast of all legislative changes ensuring payroll data and systems comply.
Our team of fully qualified accounting professionals use best practice accounting standards to integrate every aspect of the payroll process into your business, simplifying your payroll model, providing you with immediate reporting and ensuring compliance with regulatory bodies.
To learn more, call us on 02 9238 11 88 or email us at ourteam@azuregroup.com.au.
Related: Payday Super is about to get REALLY costly for you, if you overlook these 3 things
This article is intended to provide general information only, and is not to be regarded as legal or financial advice. The content is based on current facts, circumstances, and assumptions, and its accuracy may be affected by changes in laws, regulations, or market conditions. Accordingly, neither Azure Group Pty Ltd nor any member or employee of Azure Group or associated entities, undertakes responsibility arising in any way whatsoever to any persons in respect of this alert or any error or omissions herein, arising through negligence or otherwise howsoever caused. Readers are advised to consult with qualified professionals for advice specific to their situation before taking any action.
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