Businesses save money by outsourcing payroll, but exactly how? The obvious answer is that outsourcing fees are less than the cost of paying in-house payroll staff member salaries and benefits. But there are other savings created by outsourcing that are less obvious. While it’s true that hiring fewer payroll staff members keeps individual salary budgets in check, an indirect result of this is also beneficial: keeping the company size classification in check.

The federal healthcare law requires employers with 50 or more full-time workers to provide healthcare insurance to employees by 2014 or pay a penalty. So what if a small business owner is growing, currently has 47 hourly employees and needs three staff members to complete payroll?

When that company grows, hiring staff members to work in the company’s area of expertise will change the businesses classification, require the owners to provide healthcare coverage and increase company expenses. But what if a few positions were payroll? Outsourcing payroll and tax work could make the critical difference, allowing the company to hire staff members who specialize in the company’s primary business.

In addition many businesses that employee less than 50 staff members, such as restaurants and retail outlets, pay hourly wages, the most complex wages to process. Processing payroll for hourly employees is more time consuming and often more complex than processing for salaried positions. Positions that earn commissions can be complex as well. And just processing payroll isn’t enough. It has to be consistently processed correctly.

Many franchises, restaurants and retail outlets hover near the threshold at which they will be required to start insuring workers or pay the penalty. Many variables impact these businesses and determine whether or not they will be able to stay below the 50 employee threshold. Factors such as part-time and seasonal staff may impact classification. But keeping the number of staff hours devoted to business management systems, such as payroll, can decrease the threshold threat.

Estimating the cost of healthcare per employee versus the cost of paying for outsourcing services is easy math. Healthcare can cost companies thousands of dollars per employee. Outsourcing is one small fee for the entire staff and many outsourcing companies manage payroll, taxes and HR.

Making the choice to allow your company to focus on its core competencies increases learning opportunities and growth in your field of expertise. Businesses often fail due to red tape and bogged down business processing. Don’t let the burden of business stop you from being the best at what you do. Call DirectPay Payroll Services at 704-921-2730 or visit their website at