Payroll outsourcing vs payroll software in Singapore: which is right for you?

The past few years have seen dramatic changes occurring across the globe. Business operating models have evolved. The regulatory landscape has become stricter, and most organisations have shifted to hybrid working models.

These changes have all had a profound impact on payroll. Organisations are under more pressure than ever to deliver accurate, timely payroll services while still complying with changing regulations.

This is leading many businesses to rethink how they manage their payroll function. Two common efficiency-boosting options for companies in Singapore are payroll software or outsourcing payroll. But which option is most suited to your company’s requirements?

Both methods offer advantages, which can make it difficult to evaluate the one that is best for you. Plus, the number of payroll software options in Singapore seems to be limitless, increasing decision complexity.

The right option for you will depend on several factors, including your company’s:

• size;
• growth strategies;
• compliance requirements; and
• operating model.

To help simplify the decision process, this article explores both payroll outsourcing and payroll software in Singapore, and provides guidance on deciding which model is right for you.

Outsourcing payroll involves hiring a specialist payroll company to handle some, or all, of your payroll functions. An outsourced payroll provider usually offers a wide range of services, so businesses can choose the options that best suit their specific needs.

Payroll software can provide a simple, straightforward payroll processing solution, which can be particularly appealing for smaller companies and start-ups. Purchasing payroll software and employing someone to manage it can also be a cost-effective way to manage payroll in-house.

Beyond this, you can typically maintain greater control over in-house payroll processes and management, since you can dictate your own process and then change it when required.

However, as your business grows, so does your payroll complexity.

If your internal teams are already stretched to the limit, asking them to manage payroll can present a real challenge. You know that a late pay run can result in unhappy employees. You also know that a rushed pay run may have errors. The last thing you want is for a simple payroll mistake to generate costly fines or lawsuits.

Additionally, if your staff numbers are increasing, a good payroll outsourcing provider can help you to keep up with the changes. Partnering with them early in your expansion journey also enables them to get to know the ins and outs of your company as you grow.

As a bonus, they may also be able to advise on and help coordinate other aspects of your business such as tax, accounting, corporate secretarial and employee share plan services.

The past year has demonstrated that given the right tools and technology, employees can successfully work from (almost) anywhere. However, this flexibility means you’ll need to consider a payroll option that factors in the new remote nature of work.

Because SaaS payroll platforms are hosted in the cloud, accessibility is a major benefit.

SaaS payroll platforms also give you access to information anywhere there is an internet connection, so your payroll staff can work from any location. And if the software offers self-service tools for your employees, such as accessing payslips or logging leave, they can use these remotely as well.

However, companies that operate across borders will need an international payroll solution to ensure they correctly pay their people in multiple locations. Consider a payroll platform that can handle multi-currency pay runs, so no matter where your people are, you can pay them on time, in the correct currency.

While remote working is wonderful for employees who want more flexibility in their lives, it has caused more complexity for payroll teams.

According to EY’s 2022 Global Payroll Survey, remote working policies and their impact on multi-jurisdictional payroll withholding is the number one payroll consideration resulting from the pandemic.

Payroll legislation also changes frequently, so keeping up with new regulations takes time and sometimes specialist knowledge. If you are managing payroll in-house, you will need someone to stay on top of Singapore’s local regulations and update your payroll system accordingly to ensure you remain compliant.

Similarly, if you choose to outsource your payroll, it’s worth checking in advance whether your provider has people with the right local knowledge to navigate the changing landscape.

If your organisation is expanding across the Asia-Pacific region, compliance tends to get complicated.

For example, companies operating in markets with complex labour laws and regulations, such as Malaysia and China, might lack access to local expert knowledge. Without this specialist knowledge, they may struggle to operate with peace of mind.

This is where an outsourced payroll provider can really add value.

Outsourcing payroll to a reliable vendor can reduce the burden of worrying about fines or potential lawsuits due to misunderstanding complicated payroll requirements.

Handing over your payroll management to a trusted third party enables you to redirect your HR team’s resources into other business-generating activities. They can spend less time becoming familiar with the different laws across each country in which you operate – and more time focused on strategy or revenue building.

Many of our BoardRoom clients use a combination of the two solutions. They might initially come to us needing payroll software; but then as they grow and expand, they decide to outsource their payroll to us.

A trusted corporate services provider can guide you on best practices and identify key risks and potential problems. They can also provide practical solutions that save your team time and resources – not to mention, helping you to avoid costly non-compliance issues.

And the benefit of partnering with a trusted full-service provider like BoardRoom is that we can handle other aspects of your business such as:

• accounting;
• tax;
• corporate secretarial;
• company incorporation;
• share registry services;
• employee stock option plans.

Our centralised services offer assistance in multiple fields, providing access to in-depth knowledge of local payroll legislation across the region while also streamlining your outsourcing processes. And you only ever deal with one point of contact, no matter how many jurisdictions you operate in.

That makes your work life – not just your payroll processes – simple and painless.

Speak to our payroll specialists today about how we can help streamline payroll services for your company.