In-house payroll vs Remote Payroll: Here’s what you need to know

Managing payroll is a core function of every business but, more often than not, it’s also a major  pain point. Between multiple tools, manual calculations, and the requirement to keep up with ever-changing compliance laws, it can feel like a never-ending challenge.

As a result, payroll delays, errors, and manual processes have simply become “the way it is” for many companies. But with the right platform, not only can these mistakes be avoided: payroll can become a strategic asset that helps build trust and engagement with your people.

In this article, we’ll explain how Remote Payroll can help you do this, and significantly reduce the time, errors, and costs associated with in-house payroll. So let’s dive straight in.

What is the difference between in-house and outsourced payroll?

In-house payroll is when you manage all your company’s payroll processes internally, using your own staff, systems, and resources. This approach provides full control over payroll operations, but it requires significant time, expertise, and compliance knowledge, as well as investment in payroll software and updates to keep up with legal and tax regulations.

Conversely, outsourced payroll is when you delegate your payroll responsibilities to a third-party provider. The provider is responsible for salary calculations, tax filings, compliance, and reporting. This option reduces the administrative burden, minimizes compliance risks, and is often more scalable for businesses with international or complex payroll needs.

What are the main challenges of in-house payroll management?

Many companies choose to manage payroll in-house, thinking it will give them more control and save money. But, while there are some advantages, the reality often looks much different.

When you manage payroll internally, you have to contend with:

1. Time-consuming processes

Manual payroll processes — such as updating spreadsheets, recalculating tax withholdings, and double-checking calculations — drain valuable time. These tasks take your employees away from more strategic work, creating an operational bottleneck.

2. Compliance nightmares

Payroll compliance is tricky, especially for companies operating in multiple regions. Tax rates, labor laws, and reporting requirements vary by country and can change without notice. Keeping up with these rules requires constant monitoring and expertise, with even a small oversight potentially resulting in hefty fines.

3. Error-prone systems

Human error is inevitable in manual processes, and payroll mistakes can have serious consequences. Late payments, incorrect deductions, or tax miscalculations can damage employee trust, and also lead to financial penalties.

What are payroll errors costing you?

From disengagement to retention, see how payroll mistakes can really impact your business. Based on interviews with 2,500+ professionals and 1,300+ HR decision-makers worldwide.

Get your free report now

4. Hidden costs

The expenses of managing payroll in-house often go beyond hiring a payroll team. Training costs can quickly add up, and if you work with local third-party partners, you can expect to encounter all manner of hidden fees.

Labor costs can also add up. According to Deloitte, the average payroll specialist works 25 hours of overtime per month, while a recent Ernst & Young study found that payroll errors cost businesses an average of $291 per error.

In-house payroll might seem manageable at first, but as your business grows — especially across borders — the challenges multiply.

Is outsourcing payroll the solution?

Outsourcing payroll is an appealing alternative. But your experience will likely depend on the outsourcing model you opt for — as well as the partner(s) you work with.

For businesses that have employees abroad, this usually means working with local third-party providers in those locations. But, as mentioned, this approach can be problematic for a number of reasons, including: 

• Inconsistent standards. Each provider may use different systems, processes, and reporting standards, making it difficult to standardize payroll workflows and outputs across countries. This can affect your employees’ experience too, as they may receive varying levels of service quality, responsiveness, or payroll formats.

• A lack of centralization. Managing multiple providers means no unified system for payroll. This fragmentation makes it challenging to get a consolidated view of payroll expenses, compliance status, and employee data.

• Increased administrative burden. Coordinating with multiple providers increases the time and effort needed for communication, approvals, and issue resolution, which can strain internal resources.

• Scalability issues. Adding new countries or adapting to growing business needs becomes more complex and time-consuming when using multiple providers, as you must onboard and manage new vendors with each expansion.

This is why Remote Payroll is the ideal solution.

How Remote Payroll changes the game

Remote Payroll offers a better way to manage payroll — one that addresses the expenses and complexities of in-house payroll, as well as the shortcomings of traditional outsourced models.

Specifically, Remote Payroll enables you to:

1. Save time

With Remote, time-consuming tasks like tax calculations and payslip generation are fully automated. This frees your team to focus on strategic initiatives like process improvements — not payroll admin.

2. Reduce costs

By eliminating manual payroll errors and compliance risks, Remote also helps you avoid unnecessary costs and financial penalties. There are no hidden fees or passed-on costs, either; our transparent pricing ensures you know exactly what you’re paying for.

3. Be more efficient and consistent

With Remote Payroll, you — and your employees — get one consistent experience across the board.

Say goodbye to multiple spreadsheets and expense tracking tools, too. Everything is readily available on one platform, wherever your employees are based. 

4. Ensure compliance

Say goodbye to compliance worries. Our team of local experts ensures that you are fully compliant with all local employment and payroll tax laws all across the world, even when they change. And if you’re ever unsure, our team is on hand to provide support and guide you in the right direction. 

5. Potential to scale

If you plan to hire in additional locations, you don’t need to go through the process of finding and working with another local third-party payroll provider. We’ll simply add your new hires to your existing platform!

Remote Payroll in action

Want to see how Remote Payroll impacts businesses like yours in reality?

Learn how Payroll enabled this Dutch SaaS startup to:

• Cut payroll-related admin costs by $28,000

• Cut vendor fees by $80,000

• Gain 300+ hours last year in time saved

Alternatively, see how this international ecommerce SMB saves over $60,000 per year with the Payroll platform.

How to switch to Remote Payroll

Getting started with Remote Payroll is easy, whether you’re an existing Remote customer or not. We’ll work closely with you to transition your payroll management quickly and seamlessly, ensuring as little administrative burden as possible.

With Remote Payroll, you can simplify your processes, save time, and ensure compliance — without sacrificing control or flexibility. So don’t wait for another payroll headache; book a free demo with one of our friendly experts today, and start transforming your business.

Trust G2’s multi-country payroll leader to pay your global team

Reduce costs, manage taxes, administer benefits, and stay globally compliant when you consolidate payroll with Remote.

Get started nowSchedule a demo