While every payroll firm is different in how clients are introduced to them and how their systems are set up with payroll software, they all require information transmission.

You will provide essential information to be set up in their payroll software or online payroll system, as with any HR outsourcing venture. 


From there, you’ll supply payroll information regarding personnel, wages, hours, vacation rules, and benefits policies, all the information required to make your payroll automated, correct, and always on time.

How Does Payroll Outsourcing Work?

The payroll outsourcing HR provider will choose how to enable (remembering that they perform the job and you make the decisions) continuous or frequent adjustments to your payroll cycle. Nonetheless, prominent organizations provide safe and easy self-service choices for you and your staff. Of course, you must authorize any changes to your payroll.


As we advance, any issues about compliance, reporting, and tax concerns should be addressed on an ongoing basis by the professionals at your payroll provider, sparing you substantial time spent on these complicated elements. Best of all, when your supplier closely controls your payroll, you’ll have the peace of mind that you’ll avoid hefty penalties or fines.

Payroll Outsourcing Procedures

Once you’ve decided on payroll outsourcing, you must take all of the necessary procedures to ensure your success.


Payroll outsourcing to companies such as PEO Canada is easier and cleaner at the start of the year for tax filing purposes, but it may also be done at the beginning of a quarter or pay period.

Set a Start Date

Determine what is realistic for your company regarding the time it will take to give all of your payroll information and how long the conversion will take.

Begin the Data Dump

You must offer your new payroll service with the necessary financial and personnel information and documents. They’ll utilize this information to create a profile for you, get you into their payroll software or online payroll system, and set up any direct deposit processes.

Taking Care of Legal Matters

Consult with your designated representative to ensure that the relevant legal documentation, such as a signed power of attorney, is in place.

Set Up Your Security Credentials

Top providers now use cybersecurity best practices, such as two-factor authentication to protect online payroll data. However, your payroll vendor should balance the necessity for security and the ease with which you and your employees can access their system.

Educate and Inform Your Staff

Use any instructional materials or tutorials provided by your payroll provider to teach employees who may need to use self-service alternatives, payroll software, or an online payroll system. Inform your employees about any changes to the payroll cycle due to the move, such as a change in pay date.


Payroll management through a vendor may be a pleasant relief for many small business owners who are short on time. Switching from in-house payroll processing to a firm that handles all those pesky tax and legal concerns might be a wise choice that allows you to focus on what you do best, operating your business and servicing your customers.