Consider 5 Factors To Compare Payroll Service Providers



As a business grows, it may become necessary to outsource certain tasks to streamline the number of responsibilities a thriving business faces. One commonly outsourced task is payroll services. Often time, companies choose to leave such tasks to highly qualified experts who can properly ensure that employee wages are carefully managed. Additionally, outsourced payroll services can be useful incorrectly recording company earnings for tax purposes.

If you’re considering payroll service providers for the first time, or you’d like to change service providers, it’s important to research different candidates. Not all payroll companies are created equal, and it’s in your best interest to choose a provider that offers services that are compatible with your needs. In this article, you will learn all you need to know about payroll services so that you can decide on a provider that best suits your needs.

payroll services

Worker Types

Gone are the days when companies ran as the typical a 9-5 business with mainly full-time employees on staff. Thanks to modern technology, many businesses all over the world have become more flexible when it comes to the types of workers they hire. For example, instead of full-time workers, many companies hire part-time employees, contractors, freelancers, and interns. Instead of the standard 9-5, companies may offer more varied schedules, with some allowing their workers to telecommute and log hours from the comfort of their homes. What is important to note, however, is that these “special-case” workers are not always paid through the same method as typical W2 employees.

When choosing a payroll company, be sure to inquire about their experience with different worker types, schedules, and telecommute options.


Believe it or not, there is an ideal time of year to switch from one payroll service to another or even to choose a service for the first time. While conversion might be a challenge, plan to begin the process during the second quarter of the year or toward the end. October is the best month for a year-end transition. That way, the sudden change does not interfere with a business that must be taken care of before the end of the year.

When considering your options, be sure to talk to consultants at different companies. These consultants can help you determine how to make the transition as smooth as possible.

Staff Size

payroll services

The number of employees working at your company should play the biggest role in determining what level of payroll services you need. For example, small companies might choose to keep their payroll management in-house with the use of software, while larger companies with up to 10,000 employees stand to benefit from the reliable services of a payroll provider. 

Be sure to choose a payroll company that is experienced with your company’s size and industry type.

Special Circumstances

It is not just a company size that you have to consider when choosing a payroll provider. You might find yourself faced with some circumstances that only highly experienced professionals can manage. For example, if you have employees with court-ordered wage garnishments, you’ll want to be certain that the company you choose to manage your payroll can correctly determine how much of their wage will be withheld.

Also, if your company offers retirement or health insurance, a company that is well-versed in calculating these deductions is a good choice. 

Cost of Services

Perhaps one of the most important aspects to consider when choosing a payroll provider is the cost and if that cost is compatible with your company’s budget. Research all providers that you are considering carefully.

Make a list of the services you need, the services you want, and the services that you have no use for. This way, you can conduct your research in a pro/con method and can scan through the different packages available. 

Price should not be the only factor, but it is a great way to narrow down your options to determine how well you’ll be able to afford services that will benefit you. That said, try to avoid choosing the cheapest option, as the cheapest rarely equals the “best” in terms of service. Cheap won’t mean much if your needs are not being met.

Bottom Line: Research Everything

If you commonly associate with other business owners, feel free to ask them questions about the payroll provider they chose for their own companies. Sometimes the best way to gauge the effectiveness of a company is to observe the results firsthand through testimonials. If you’d like a second opinion, many companies have customer testimonials listed on their websites, or through the Better Business Bureau. Take your time and make the most informed choice you can.

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