Is Outsourcing Your Payroll Worth It in NZ?

Managing payroll efficiently is an essential part of running a successful business, yet payroll can be complex and time-consuming.

  •  New Zealand businesses employ over 2.4 million employees across around 562,500 businesses. 56% of these businesses have no employees, 23% have < 4 employees, 16% have 1-19 employees and 5% 20 – 199 employees. The reminder are larger businesses of which there are few.  Source: MYOB Business Monitor Survey 2022
  • There are around 50 pieces of legislation which affect employment in New Zealand.
  • NZ was ranked the 13th most complex for payroll complexity in the world and 4th in Asia. NZ is ranked 23th in the world for complexity in government reporting. 
  • Employers say annual leave, recruitment/onboarding and compliance issues make up 4 out of the top 10 pain points of running a business

Time spent dealing with payroll can often be better focused elsewhere, especially for smaller businesses that do not have the resources to dedicate to payroll management. Outsourcing payroll to a payroll bureau service can help businesses reap the rewards of an efficient payroll system while allowing them to focus their time on other areas of their business.

The Benefits of Payroll Bureau Services

Outsourcing payroll to a payroll bureau service can provide many benefits for businesses in New Zealand.

The main benefit of payroll bureau services is the time savings that they offer. A payroll bureau will take care of payroll processing, leaving business owners more time to focus on other aspects of their business. This can be especially beneficial to small businesses that may not have the resources dedicated to payroll management.

Payroll bureaus can also help reduce payroll costs for businesses as they typically charge a flat rate fee rather than an hourly rate which would often be charged by an in-house payroll expert. This allows companies with limited budgets to outsource without having to worry about high expenses associated with payroll management.

In addition to cost savings, payroll bureaus also offer other services such as IR filing and payroll compliance assistance. This can help businesses ensure they are compliant with New Zealand payroll laws, reducing the risk of being penalised for errors or late filing and late payment.

Finally, payroll bureau services provide businesses access to payroll experts who are knowledgeable about all aspects of payroll and understand the complexities of payroll processing. This allows them to handle payroll management efficiently while providing business owners with peace of mind that their payroll is handled correctly and accurately.

Overall, outsourcing company payroll to a payroll bureau service offers many benefits for businesses including time savings, cost savings and access to experienced payroll professionals. By taking advantage of these benefits, businesses can save money on their payroll costs and focus their time on other aspects of their business.

Types of Payroll Bureau Services Available in New Zealand

There are many payroll bureau services available in New Zealand to help businesses outsource payroll. Most payroll bureaus provide a range of services, including payroll processing, payroll reporting payroll reconciliation and payroll taxes. Here is an overview of the types of payroll bureau services available in New Zealand:

Payroll Processing

This service entails the recording and processing of employees' payments and deductions (e.g., PAYE, KiwiSaver contributions).

Payroll Reporting

The payroll bureau will generate accurate reports on wages each pay period or financial year end which includes tax calculations, superannuation payments, KiwiSaver deductions, annual leave reports, employee summary of earnings and other reports.

Payroll Reconciliation

After the payroll has been processed and payroll reports have been generated, payroll bureau services will also reconcile payroll data to the IRD. This can be tricky to balance if an error is made.

Payroll Tax

The payroll bureau can calculate payroll taxes such as PAYE (Pay As You Earn) and KiwiSaver contributions that need to be submitted each month.

By outsourcing payroll to a payroll bureau service, businesses can save time and money when it comes to managing payroll in New Zealand. With the right payroll bureau service, businesses can benefit from expedited processing times, accurate reporting and more efficient payroll management overall. It’s important to find the right payroll service for your business needs so you can make sure your employees are paid accurately and on time every time.

By utilising an experienced payroll outsourcing service, businesses can trust that payroll will be handled in accordance with New Zealand payroll laws and regulations. This makes payroll a much smoother process and eliminates the need for costly payroll mistakes.  Outsourcing payroll to a payroll bureau service is an efficient and cost-effective way to manage payroll in New Zealand.

What to Look for in a Payroll Bureau Service in New Zealand

When looking at outsourcing payroll, there are a few key factors that you should consider when selecting the right payroll outsourcing provider.

First, look for a payroll bureau that is up-to-date with all relevant payroll regulations and legislation in New Zealand. This will ensure you remain compliant with the law, avoid penalties or fines and protect your business from any potential legal issues. Every year the Employment Court of New Zealand deliberates on around 160 cases concerning employment.

Second, it is important to select a payroll bureau service that offers secure data storage solutions such as cloud-based technology. Your payroll data must be protected against any potential security threats, so make sure the payroll bureau has the appropriate tools and systems in place to keep your employee information safe and secure.

Third, look for a payroll bureau service that offers comprehensive payroll services. This should include payroll processing, payroll record and report generation, payroll taxation and deduction services, direct deposit payments and more. A good payroll bureau service should also be able to help you with payroll-related queries such as superannuation advice, wage review calculations and deductions advice.

Fourth and finally, select a payroll bureau that has a great customer service team available to provide helpful guidance whenever needed. This will ensure any issues are quickly resolved in an efficient manner so you can continue running your business without disruption.

Conclusion

By outsourcing payroll to a payroll bureau in New Zealand, businesses can save time and money while ensuring payroll is managed correctly and efficiently. When selecting the right payroll bureau service for your business needs, make sure to look for one that stays updated with payroll regulations and legislation, offers secure data storage solutions and comprehensive payroll services, as well as has great customer support available. With the right payroll bureau service in place, you can trust that payroll will be handled efficiently and accurately each and every time.

Lynley Averis

Lynley is a highly experienced MYOB Certified Consultant who has worked with MYOB software for over 20 years. She has been MYOB Partner of the Year in 2010, 2013 and 2019.