Some examples of how SME Payroll Services processing costs compare with in-house costs
One of our clients, with 26 employees, asked us to help him with some figures before making his decision. What we found was this:
His manager, who did the monthly and weekly payrolls cost him (including er’s NI) £21.37 per hour after adjusting her annual salary to working hours (ie by excluding weekends, holidays etc) and she spent about an hour and a half each week on the workforce payroll, plus about half an hour each month on the salaried staff – plus of course several more hours at the year end sorting out P60’s, P35’s, etc for both payrolls.
The annual cost of using her services to do the payrolls amounted to £1,752.
With his help, we calculated and added to that another £900 for the software and maintenance, security stationery, back-up time and hardware maintenance, a dedicated printer, etc
This brought the annual cost of doing the payroll in-house to £2,652.
Our quote for handling the two payrolls came to £1,320 for the year - a 50% saving of £1,332 pa.
His decision was instant.
He is now a very happy client, with none of the worries attached to payroll maintenance, whilst at the same time saving over £1,000 a year. And his manager, too, is deeply relieved to get rid of this interruption to her work, freeing up nearly 70 hours of her time annually to get on with her proper job.
A recent basic quote for a ‘20-employee monthly payroll’ was just £584 pa, an incredible 69% SAVING of £1,229 on their internal cost of £1,883 pa. To see the calculations, click here.
Again, the business owner didn't need any further evidence as to the significant cost savings she could reap from outsourcing her payroll, not to mention the additional time it freed up for her and her payroll assistant.