Imagine you're a chef running a bustling restaurant. You're great at creating delicious dishes, but now you're spending more time counting cash and managing staff paychecks than cooking. Your restaurant might get a terrible rating because of this. This is what running a growing business can feel like when payroll takes over.

But what if you could hand off all those number-crunching tasks to a payroll expert, letting you focus on what you do best?

That's the power of payroll outsourcing. In this article, we'll dive into how this solution is changing the game for businesses of all sizes, freeing up time, reducing headaches, and even helping companies expand globally with ease.

What is payroll outsourcing?

Payroll outsourcing is when a company hires an external service provider to handle its employee payment processes.

One common misconception about payroll is that it's simply the act of paying employees. In reality, payroll is a much more complex and comprehensive process. Payroll often includes:

1. Calculating overtime, bonuses, and commissions
2. Managing benefits such as health insurance and retirement contributions
3. Handling tax withholdings (federal, state, and local)
4. Ensuring compliance with labor laws and regulations
5. Maintaining detailed records for auditing purposes
6. Processing garnishments or child support payments
7. Generating various reports for management and government agencies

Payroll outsourcing doesn't mean losing control of your employee data or financial decisions. The company still maintains oversight and makes key decisions about salaries, bonuses, and benefits. The outsourcing provider acts as a specialized partner, handling the execution and administrative aspects of payroll. They don't determine pay rates or hiring decisions — those remains the responsibility of the main company.

Companies can choose to outsource specific parts of the payroll process while keeping others in-house. For example, a business might outsource tax filing and compliance but handle basic paycheck processing internally.

Advantages of outsourcing payroll services

Reduces risk of non-compliance with tax laws and regulations

Every country, and sometimes even different parts of a country, have their own rules about how to pay employees of any company. For example, in the US, it's typically 1.5 times regular pay after 40 hours a week. But in France, it's after 35 hours. A global payroll provider knows these differences and calculates correctly. Some countries require monthly payments, others bi-weekly. A global payroll provider can handle these varying schedules without missing deadlines.

These rules can be tricky and they change often. If a company doesn't follow these rules, they can get in legal trouble and might have to pay a lot lots of fines. When you hire a payroll service, they know all about payroll rules. It's their job to stay up-to-date with any changes. They make sure that your company is doing everything right when it comes to paying workers and handling taxes.

This is especially helpful if your company has employees in different countries. It can be hard for you to know all the rules of all the countries where you have contractors or employees. But a payroll service that works globally knows how to tackle payroll for every country. This lets you focus on running your business instead of worrying about payroll problems.

Saves time and resources for core business activities

Let's say processing payroll takes you or your office manager about 8 hours every two weeks. That's 16 hours a month or nearly 200 hours a year. Outsourcing could give you back those 200 hours to focus on client work or business development.

For a small agency, that's like getting more than 6 weeks of full-time work back. What could you do with an extra 6 weeks? Maybe land a new big client? Develop a new service offering? Or just have more time to think strategically about your business growth? This time savings translates directly to your bottom line. If your agency bills $150 per hour, those 200 hours could potentially generate $30,000 in additional revenue if used for billable work.

If you're looking for a tool to outsource your payroll to, schedule a demo with Thera and let us show you how many hours you can save.

When you outsource payroll, you get to spend your time on what really matters - building your product, talking to customers, or coming up with new ideas. That's where the real value of your business comes from.

If you have an HR team, they can focus on more important things, like hiring great people or making your workplace awesome. They're not stuck doing paperwork all day. Every hour you or your team spend on payroll is an hour you're not spending on focusing on your business. Outsourcing gives you that time back.

Helps scaling teams by handling increased workload

When you're growing, every new hire brings a flood of paperwork, tax considerations, and compliance headaches. Your finance person, who used to handle payroll in a few hours each month, will drown in spreadsheets and local tax codes. Worse, they would be so swamped that they're worried about making mistakes that could cost the company big time in fines or back taxes.

This is where payroll outsourcing becomes a lifesaver for scaling teams. Instead of scrambling to beef up your in-house payroll capabilities – hiring new staff, investing in global payroll software, and trying to become experts in international labor laws overnight – you can lean on a payroll service that's built to handle this kind of rapid scaling.

Solutions like Thera have got the systems in place to onboard new employees quickly, whether they're in San Francisco, London, or Singapore. We know how to handle different currencies, tax systems, and compliance requirements without breaking a sweat. As you grow from 50 to 100 to 500 employees, we can absorb that increased workload seamlessly.

Ways to outsource payroll

Theere are 3 main ways to outsource payroll.

1— Full-service payroll provider

Hire a company to handle all aspects of payroll, including calculating wages, processing payments, filing taxes, and managing compliance. They often provide additional HR services like benefits administration. This option is ideal for businesses wanting a hands-off approach to payroll. The provider takes on most of the responsibility and liability, reducing your workload and risk.

2— Online Payroll Software

You can use cloud-based software to manage payroll in-house while automating many tasks. These platforms calculate wages, taxes, and deductions, generate pay stubs, and often offer direct deposit. Many also provide tax filing services. This option gives you more control over your payroll process while still benefiting from automation and expert support. It's generally more cost-effective but requires more involvement from your team. Examples of such tools are — QuickBooks Payroll, Xero.

3— Professional Employer Organization (PEO)

You can partner with a PEO to become a co-employer of your workers. The PEO handles payroll, benefits, HR administration, and compliance. This option is comprehensive, often including services beyond just payroll. It can be particularly beneficial for small to medium-sized businesses looking to offer better benefits packages and reduce administrative burdens. It involves sharing control over some employer responsibilities.

Outsourcing payroll to Thera

If you're looking to hire employees in the USA and outsource payroll, we at Thera can help. We've built a platform that takes the headache out of managing payroll across all 50 states. We've designed our system to handle everything from tax compliance to benefits management, all in one place. We take care of comprehensive tax compliance and registrations, automating W-2 generation and distribution to simplify your year-end processes.

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"Switching to Thera for our payroll was one of the best decisions we made at Oceans. Thera has exceeded our expectations. We can now manage hundreds of contractors, along with payments and compliance in one platform. The platform has saved us valuable time and resources. Highly recommend!"

~Ian Myers, Founder, Oceans

Our approach is simple: we use smart technology to make payroll faster, more accurate, and completely transparent. No hidden fees, no confusing processes. If you'll need to reach us you won't have to wait for a reply as we'll onboard you to our private slack channel so you have direct access to payroll experts.

Thera isn't just about payroll - we offer a complete ecosystem of solutions for hiring and paying global workforce. This includes contractor management and Employer of Record (EOR) services, making us a versatile solution for both domestic and international workforce management.

Schedule a demo with Thera and let us show you how we can simplify your payroll processing.

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