Why Singapore-Based Companies Need To Outsource Payroll Processing

There are situations when a company has to decide between payroll outsourcing service or in-house payroll processing to save on costs. Many consider outsourcing as more expensive but they fail to consider the advantages that can be gained like compliance with federal, state and local regulations in payroll computations.

Under certain circumstances, a better solution for Singapore-based companies including those with operations in the ASEAN region is to outsource payroll management to professional firms. While HR personnel can monitor regulatory changes in Singapore and Southeast Asian region, if the personnel responsible for payroll processing is absent or suddenly resigns from the job, the company loses the expert knowledge of the regulations that have to be followed in Singapore and across Southeast Asia.

When a Singapore-based payroll outsourcing provider is chosen, there is continuity in compliance because regulatory knowledge is not dependent on an individual. Outsourcing is very important to new companies that are unfamiliar with the local labour regulations in Singapore and ASEAN. SME’s can save money through outsourcing because they will have access to advanced automated payroll software without entailing extra costs.

Compliance and the reduction of payroll-associated risks are the main reasons why Singapore-based companies prefer to outsource payroll. Outsourcing providers have staffs that specialize in being updated with the rules and regulations at the national, state, local and industry level including changes in withholding tax tables and social insurance deductions.

When companies outsource their payroll, they can streamline the HR department to focus on employer-employer relationship and other strategic employee management issues. Confidentiality and transparency is also ensured because employees are not aware of the salary details of the organization. There is greater risk of information becoming public if payroll processing is done in-house. All sensitive data are secure and only the top management and key decision makers are knowledgeable of salary details.

There is more transparency when a company works with payroll outsourcing service because mistakes can be reported immediately without the added complexities of inter-departmental reporting structures. However, companies must be extra diligent when choosing outsourcing providers to ensure that the resources are compatible and customized according to the company’s requirements.

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