Outsourcing Payroll

Most associations and non-profits cannot justify, from a service and cost perspective, continuing to do payroll in-house.

Outsourcing this function can offer the following benefits:

• The association staff can focus on core mission-related competencies.

• Payroll gets done in a timely manner even if applicable staff are sick, on vacation, or involved in handling other priorities or crises.  

• There is no need to access and pay for payroll software and updated tax tables.  

• Source deductions and employer taxes are submitted electronically to government.

• Information for accounting transactions and employee pay information are provided promptly. 

• Payroll is deposited directly in employee bank accounts. 

• Year-end documentation is created in an accurate and timely manner.

• Employee termination documentation can be initiated, in advance, by senior management without employee involvement.

• Costs of administration are lower.

Two major companies now dominate the payroll outsourcing market – ADP Canada and Ceridian Canada.  The service they provide includes calculating deductions and payment amounts, electronic deposits to employee accounts, government remittances, and creation of all documentation and reports.

Both companies offer affordable payroll solutions for organizations with as few as one or two employees.  The fees charged vary according to number of employees, number of pay periods, etc., and extra fees may be charged for paperwork and documentation production. The initial paperwork can be a bit daunting (though not much different than that for a credit application), however the result is worth it.  There is also a one-time set-up fee (approximately $100).  To avoid surprises make sure that you factor in all the fees. 

In most cases, the costs related to outsourcing payroll will be less than doing payroll in-house.  The many service-related benefits are extra incentives to switch.

The practices described in this area are described as Better Practices for a very good reason. We have a great deal of difficulty with the term best practices used in any other context than to refer to the results of benchmarking exercises involving real and relevant organizations with tangible results.  We offer Better Practices related to areas where we feel that change is needed in associations. Better Practices are intended to provoke thought, and to encourage organizations to think about what they are doing and how they are doing it.  

To build better
associations and non-profits by 
delivering unique
and unparalleled expertise, programs
and services
to their staff and
volunteers.