RSS icon

Top Stories

DEAR WORKFORCE

Dear Workforce Which Costs More Outsourcing Payroll Or Using A Service Bureau

When outsourcing payroll, what is the typical cost per paycheck for service bureau setup vs. total outsourcing arrangements (front and back office)?
March 5, 2004
ASK A QUESTION
Related Topics: Outsourcing, Dear Workforce
Reprints
Dear Cost-Conscious:

Price per paycheck is not an accurate measure; price per employee serviced would be more appropriate. The pricing would include the inputs to payroll, administration of payroll, interaction with time and attendance, check production, direct deposit, tax withholding, and filing. Best-practices cost for the full outsourcing model is between $50 and $75 per active employee. The service bureau costs about $30 per active employee.
Comparing the two models is like comparing apples to oranges; actually, maybe navel oranges to all oranges would be a better metaphor, since a service bureau model is a subset of the outsourcing model.
A service bureau provides only the payroll tool. You would choose a payroll service vendor to maintain the system and ensure that tax updates and legislative changes are reflected. Administration of payroll, however, would continue with your current staff in-house.
Conversely, in a completely outsourced model of payroll, all functions--process execution, technology and maintenance, issue resolution, compliance, and vendor management--would be turned over to an outside company.
SOURCE: Margaret-Ann Cole, Implementation Director,Mellon HR Solutions, Fort Lee, New Jersey, March 13, 2003.
LEARN MORE: Discuss in theTechnology Forum.
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.
Ask a Question
Dear Workforce Newsletter
ASK A QUESTION

 The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

If you have any questions or concerns about Workforce.com, please email customerservice@workforce.com or call 312-676-9900.

The Workforce fax number is 312-676-9901.

Sign up for Dear Workforce e-newsletters!

Comments powered by Disqus