Offshore Vs Onshore: Where should you be outsourcing your payroll?

31st January 2019

Outsourcing payroll is being adopted by more and more organisations in recent years as it has measurable benefits including helping your company reduce costs and comply to the ever-changing laws and legislation surrounding payroll. With improved technology, reliable global communications and robust amount of offshore payroll providers, the question of offshore versus onshore might have entered your mind, so which should you choose?

 

What do you need to consider?

 

Costs

One of the main factors’ companies consider when finding a payroll provider is the cost. Offshore tends to be the least expensive option, however, you need to be careful of hidden costs that you aren’t aware of. The top line, lower cost per payslip doesn’t actually always result in overall savings to the business, so when you are looking into your offshore provider you need to ensure you are actually getting a good price.

 

Time Zones

Due to different time zones and long distance, contacting an offshore payroll provider can be made more difficult as working hours may differ from yours. This is particularly challenging when you have an urgent issue that needs to be sorted quickly. A UK provider can be contacted easily and have the same working hours. And the cost of calls will be considerably less! As the UK isn’t a very big place, your payroll provider would most likely be just a car journey away. This means that should you require a face to face meeting you haven’t got to jump on a plane to meet up.

 

Knowledge

Probably the most important advantage to having an onshore provider is the UK payroll knowledge that they will have. Being based in the UK they will easily be able to follow any news and updates about Payroll and have a more in-depth knowledge of any changes in HMRC rules legislation, and general UK laws that could affect your business, such as auto-enrolment or National Minimum Wage. You want your payroll provider to be able to answer queries that are outside of the standard and providers that are located offshore might lack the intuitive insight into the day to day experience of a UK employee.

 

Overall the choice between an offshore or onshore provider comes down to the perception of value. Offshore is usually cheaper as they have lower labour and infrastructure costs, however, it is important to weigh up whether the positive of onshore outweigh this. For the vast majority of companies, onshore payroll providers continue to remain the better option.