The Difference Between In-House and Outsourced Payroll

Possibly one of the most important functions for any organisation, payroll has the means to influence every aspect of an organisation. Why? Well, it’s how we compensate our employees and reward them fairly for the value of their time. We’re talking about the bread and butter stuff here for every business.

Niamh Ennis, Associate, with our Dublin team, specialises in working Accounts Payable (AP), Accounts Receivable (AR) and Payroll careers. In part 3 of our ‘Barden Payroll Series’ Niamh focuses on how payroll is processed and does that actually make a difference to organisations, candidates and teams.

Why Do I Need to Know About This?

A company will normally have two options when it comes to making the decision on how to manage their payroll – take responsibility for the function and deliver it internally, or outsource the service to an expert payroll provider.

It should be pretty much the same either way – process the information, prepare the calculations and submit the payments for approval. However, when you’re deciding which option is best for your organisation it’s vital to take the following factors into account. It’s also essential to be aware of and familiar with these if you are working in payroll, or if you are considering a career in payroll.


A business may have only 3 employees on their team so it wouldn’t make much economical sense to hire a payroll specialist to join the team and process the payroll internally – the volume just isn’t there. Likewise, a company could have over 2,500 employees across the business so logistically, it would be a no brainer to hire a team of payroll experts to solely focus on the payroll function for the business.


Again, this will come down to the needs of the business, but the frequency of payroll varies across industries and disciplines. Payroll can be paid on a weekly, fortnightly or monthly basis which changes how the payroll will be processed and the timing of delivery. Take a local restaurant for example – staff are most likely paid on an hourly basis and have time-sheets to be processed at the end of the week. Compare this to a business where all of the employees are on a monthly salary. The frequency impacts the process and the solution you choose.


When we add in BIK, pensions, healthcare plans, bonuses, commissions, share options, annual leave, sick leave, maternity leave, tax-saver schemes, and more, things start to get complicated.  These all add to the complexity of calculating payroll for employees as opposed to just adding up the hours worked by the hourly rate. Including these add-ons requires more expertise and knowledge to ensure the calculations are done correctly and the right amount is paid out.


Multinational organisations are on the rise for a number of years now which means businesses with a global presence have had to reassess how their payroll is provided to ensure geography isn’t a limitation for their payroll process. This means some in-house payroll functions are responsible for managing and overseeing the payroll process across a range of international regions which adds an extra dimension in terms of currencies, FX rates, local tax laws and regulations and bank payments.


Payroll systems are designed to organise all tasks and activities relating to managing the rewards system. There are lots and lots of different packages available on the market, so choosing the right one for you and your organisation is vital. The system you choose to use will play a pivotal role in processing payroll for your business. Generally, there are stand-alone payroll packages (which are usually add ons to your existing systems) and enterprise resource planning (ERP) software (which provide a one-stop solution, and are usually integrated to your existing systems). Choosing the right system is a big decision, and will play a key part in processing payroll for your business.

Whichever decision an employer makes on how to pay employees, it should be the best solution for them taking all of the above into account. What is most important is that employees are paid on time and that there is someone there at the end of the phone to answer any queries they may have.


Barden’s Payroll Series

Recently launched the Barden Payroll Series aims to deliver payroll focused content and interviews with payroll profession, and shine a spotlight on payroll as a career in the Irish market. Feel free to get in touch with Tara Higgins or Niamh Ennis if you’d like to have a chat about the payroll market, career opportunities, building your payroll team or have an idea for a blog.

To view the other blogs in our series, click the links below…

Getting Your Payroll CV Just Right

PAYE Modernisation…What Has It Got To Do With Me?







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