Payroll Outsourcing Services 101 (A Short Primer!)

Typical Features of Payroll Outsourcing Services

Third party #payroll providers typically provide services such as –

Employee record management

• Payroll processing 
• Integration with corporate financial system
• Government reports for the countries in which they operate
• Tax filing
• Employee self-service via mobile device for time and attendance, leave, and expenses
• Deposit pay direct to employees’ bank accounts
• Year-end processing
• Wage garnishment and wage splitting to multiple accounts
• Reporting options on both a local and multi-country level
• Customer support

Benefits of Payroll Outsourcing

Some of the reasons for outsourcing payroll include –

• Able to focus on core business
• Compensate for lack of internal payroll expertise
• Concerns about payroll accuracy
• Need to integrate payroll data with the corporate IT systems
• Improved employee satisfaction
• Concerns about payroll security
• Concerns about compliance risk and fines
• Time and cost savings
• Confidentiality concerns
• Concerns about fraud

Classic Payroll Outsourcing Model

In the classic model –

• The customer provides raw data such as attendance information, employee records etc.  This data may be provided in electronic format or paper based
• If electronic format, it may be sent to the provider by FTP, email etc, or it may be integrated directly with the provider’s payroll software
• The provider uses their own payroll software to calculate the pay for each staff
• Results are sent back to the customer including payslips, bank transfer file, and possibly journal entries in electronic format for upload to the corporate financial system

Hybrid Model

Some payroll service providers (such as Humanica) also provide HCM software.  This means they can offer different models, such as –

• The customer uses the HCM software provided by the vendor for all HR admin, including employee records, scheduling, attendance records, leave requests and so on
• The provider can log into the customer instance and run the payroll on their behalf, using the information already in the system

Can we Help?

Humanica and Data On have been providing HCM solutions and payroll services for SE Asia since 2003.  We have localised versions for Philippines, Singapore, Indonesia, Malaysia, Thailand, Brunei, Vietnam and the Middle East, and further customers in Australia, Lao PDR, Maldives, Cambodia, Korea, Japan and elsewhere.

If updating your HCM solution and/or outsourcing your payroll would improve your organisation, we’d be delighted to assist with your planning.  Feel free to reach out to me, Matthew Pearson, by email at matthew.p@humanica.com or by phone/WhatsApp/Facetime at +66 820 950 880.