• 3,000 firms
  • Independent
  • Trusted
Save up to 70% on staff

Home » Articles » 3 Types of payroll systems: What’s the difference?

3 Types of payroll systems: What’s the difference?

In a conventional setup, payroll processing is typically done in-house.

This works in two disparate cases: bigger companies that streamline the payroll across all departments or small companies with a local staff numbering less than ten employees, with few variations to weekly work hours or wages.

In the latter case, it is practical to process payroll in-house with payroll software; the employee designated to do payroll will be responsible for keeping accounts, staying up to date with payroll tax laws, and safeguarding the company’s relevant financial data.

But if this is not the case for your company, and you anticipate for your bookkeeping needs to grow a little more complex over time, what are your alternatives to doing the payroll processing in-house?

3 types of payroll systems

Here are three types of payroll systems that you can consider outsourcing.

1. Bookkeepers and CPAs

It is possible to commission the services of individual bookkeepers or CPAs to handle payroll and tax records.

Get 3 free quotes 2,300+ BPO SUPPLIERS

When taking on an independent contractor, it is important to look for a professional with expertise and flexibility whom you can trust to help you accurately deposit and pay for your respective area’s federal tax liabilities. Payment will still be made in your company’s name.

Bookkeepers and CPAs

2. Payroll services

Firms specializing in payroll services are a good bet for ensuring your company’s timely and accurate fulfillment of payroll obligations. They typically offer necessary administrative services such as direct bank deposits and automatic deductions from paychecks.

Some payroll services are also already aware of the US Department of Treasury’s Electronic Federal Tax Payment System (EFTPS) and may offer electronic filing on your company’s behalf.

By incorporating this feature into their offerings, these services streamline the processing of payroll and tax obligations for businesses. Moreover, a professionally managed payroll system can handle the complexities of tax compliance, reducing employers’ burden.

Businesses can benefit from leveraging a payroll service that not only facilitates payroll processes but also integrates with government tax systems for seamless tax filing.

With an employee payroll system that includes electronic tax filing capabilities, companies can ensure accuracy and timeliness in meeting their tax obligations.

Payroll services

3. Online payroll

This model is a particular boon to SMEs. In addition to tax filing services and administrative services, online payroll companies typically allow 24/7 access and monitoring of payroll details through a secure browser without any additional cost for software and/or equipment.

Get the complete toolkit, free

With the best payroll software, businesses can streamline their payroll process efficiently. The online payroll management system enables easy access to payroll data, facilitating quick retrieval and analysis.

Through the online payroll system, it will be easy to do some of the basic payroll operations and search for and update details on employee records such as sick leaves, vacation days, and respective deductions.

Get Inside Outsourcing

An insider's view on why remote and offshore staffing is radically changing the future of work.

Order now

Start your
journey today

  • Independent
  • Secure
  • Transparent

About OA

Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO).

The #1 outsourcing authority

Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between world-leading outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 450+ podcast episodes, and a comprehensive directory with 3,900+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.

“Excellent service for outsourcing advice and expertise for my business.”

Learn more
Banner Image
Get 3 Free Quotes Verified Outsourcing Suppliers
3,000 firms.Just 2 minutes to complete.
Learn more

Connect with over 3,000 outsourcing services providers.

Banner Image

Transform your business with skilled offshore talent.

  • 3,000 firms
  • Simple
  • Transparent
Banner Image