11 Best Outsourced Payroll Services Companies in 2025

Accurate, on-time payroll is crucial to your employees and your organization as a whole. It builds trust with your team, maintains compliance with tax regulations, and ensures everyone can focus on their work rather than worrying about getting paid. 

Businesses are increasingly choosing to outsource payroll services to maximize the efficiency of this function and ensure compliance with relevant laws and tax obligations. However, identifying outsourcing companies that can meet your payroll needs can be challenging.

To make the process easier for you, this article will explore the best companies providing outsourced payroll services in 2025. We’ll also offer additional insights into outsourcing payroll tasks. 

What Is Payroll Outsourcing?

Outsourcing payroll services means hiring an external company to handle all aspects of payroll administration, including:

• Calculating employee pay
• Withholding employee deductions (for example, Social Security and federal taxes)
• Ensuring that employees are paid on time

This allows you to focus on core activities without the administrative burden of payroll compliance and management. It can be a standalone solution for companies looking solely to streamline their payroll processes or a part of a broader suite of outsourced accounting services. 

One study showed that 61% of businesses outsourced their payroll to an external company, showing the popularity of this approach.

5 Reasons Why You Should Outsource Your Payroll Services

Most businesses start off administering their own payroll. But as they grow, the reasons to start outsourcing become more compelling. Here are five reasons why you should outsource your payroll services:

1. Save time

Managing payroll in-house requires a significant time investment and attention to detail. You’ll need to handle a wide range of tasks, including:

• Maintaining employee records
• Calculating payment amounts
• Handling deductions and contributions
• Ensuring payroll tax compliance
• Preparing necessary reports (including annual payroll tax reporting)

By outsourcing payroll, you free up internal resources that you can use for more strategic tasks within your company, like improving business operations, customer service, or expansion efforts.

2. Cost savings

For many small and medium-sized businesses, the costs associated with maintaining an in-house payroll team—including salaries, software subscriptions, and training—can be high. 

Outsourcing payroll can often be more cost effective, particularly when considering the potential financial impact of payroll errors and the opportunity cost of using limited internal resources for payroll tasks instead of core business functions.

3. Access payroll expertise

Payroll service providers are staffed by professionals specializing in payroll processing. They understand the complexities involved, including legislation, tax rates, regulatory changes, and the latest payroll technology.

Their expertise can be particularly beneficial for businesses that operate in multiple jurisdictions, countries, or regions with varying tax laws and reporting requirements.

4. Reduce payroll mistakes

Payroll mistakes can be costly in terms of both finances and employee satisfaction. A study from Ernst & Young found that a single error costs an average of $291 to remedy—and companies have an average accuracy rate of just 80.15%. 

Errors can result in overpayments, underpayments, or incorrect tax filings, which could lead to penalties or upset employees. Payroll providers are less likely to make these errors because they have robust checks and balances and update their systems regularly to comply with changing regulations.

5. Ensure compliance

Keeping up with payroll-related laws and regulations can be challenging, especially since they change frequently and vary by location. Outsourced providers stay current with anything affecting payroll and help ensure businesses comply with relevant tax and employment legislation, reducing the risk of costly legal issues or fines.

Should You Outsource to a Payroll Company or a Contractor?

The decision to outsource to a payroll company or an independent contractor depends on several factors, including the size of your business, the complexity of your payroll needs, and your budget. 

Outsourcing to a payroll company

Typically, this is a more structured form of outsourcing, where you work with a professional payroll service provider. These companies offer comprehensive services and have teams of experts to handle various payroll functions.

Pros

• Scalability: Companies can efficiently handle the increase in workload as your business grows.
• Full-service options: Many payroll companies offer various services, including tax filing, employee benefits administration, HR services, and more.
• Technology: They often use advanced software for payroll processing, providing portals for employers and employees.

Cons

• Cost: While this method can be cost effective for many businesses, smaller organizations might find full-service options expensive.
• Less personalized service: Since these firms have larger client bases, their services might be less personalized than those of an individual contractor.

Outsourcing to an independent payroll contractor

Outsourcing to a payroll professional who operates as an independent contractor can be an excellent option. It will often feel like they are an extension of your in-house team rather than working with a third party. 

Pros

• Personalized service: They are more likely to offer personalized and flexible services tailored to your needs.
• Cost: Working with an independent contractor might be more cost effective for small businesses with straightforward payroll needs.
• Direct communication: Direct access to the person handling your payroll can result in swift responses and resolution of issues.

Cons

• Capacity: An independent contractor may not have the capacity to scale services quickly as your business grows.
• Resources: They might not have access to the same level of technology and software as larger businesses, which could affect efficiency and security.

11 Top Payroll Outsourcing Companies

In no particular order, here are 11 top payroll outsourcing companies known for their expertise and reliability in managing payroll processes for businesses or helping companies source payroll professionals.

Each company brings a unique set of key features, strengths, and specializations, making them suitable for different types and sizes of businesses. 

1. Near

Near doesn’t offer payroll services directly; instead, we help companies connect with, hire, and onboard Latin American (LatAm) professionals, including payroll specialists. 

Nearshoring allows you to take advantage of similar time zones and lower overheads while hiring a professional who can collaborate seamlessly with your in-house team.2. Complete Payroll Solutions (CPS)

2. CPS

CPS is a payroll-centered solution founded in Springfield, Massachusetts. It serves 10,000 clients across all 50 states with solutions for daily, weekly, and monthly payroll tasks.

3. ADP

As one of the top names in business services, ADP provides HR and payroll outsourcing to businesses of all sizes. It offers comprehensive administrative tools and online payroll services, including employee portals and tax filing.

4. HR Path

HR Path has locations across 22 countries to help businesses with payroll, consulting, solution implementation, and more. It is a payroll partner with SAP and Workday that provides CPS, MPS, and BPO services.

5. Workday

A partner with Alight, NGA Human Resources, OneSource, everBe, and HR Path, Workday offers flexible payroll outsourcing services, payroll administration services, and tax and garnishment administration.

6. Intuit QuickBooks

QuickBooks’s payroll services include a suite of features, like healthcare packages, 401(k) plans, workers’ comp, and HR advisor services. It helps 1.4 million businesses manage payroll and file taxes.

7. Gusto

With a client base of over 300,000 customers, Gusto is a trusted payroll, HR, and benefits choice for small to medium-sized businesses. It offers three pricing plans to fit your needs.

8. Paychex

Paychex is a payroll, HR, and benefits solution recognized as one of the world’s most ethical companies, a leader in customer satisfaction, and a top HR product. It offers ways to automate taxes and reduce risk.

9. Square

Payment processor Square has implemented an outsourced payroll solution aimed at small businesses. It handles tax filings and payments using payroll software tailored to retail, food and beverage, and other storefront companies.

10. Oyster

Oyster is a global payroll provider with worldwide coverage boasting over 99% accuracy. It offers integrations with BambooHR, Expensify, Workday, HiBob, Personio, and more.

11. Paylocity

Mobile and online payroll solution Paylocity offers regular payroll and global payroll. It has been recognized by G2, Forbes, Built In, and TrustRadius in 2024 and has received several awards.

Best Practices for Outsourcing Your Payroll

Outsourcing payroll is an important decision that can have many benefits for your business if done correctly. Following best practices when outsourcing your payroll is critical to ensure a smooth transition and ongoing success. 

Here are two key recommendations:

Stay up to date with regulations

Even when you have outsourced your payroll, awareness of the latest industry regulations is crucial. Your business remains responsible for compliance, so selecting a third-party provider with a strong record is paramount. 

Be proactive by having regular check-ins to discuss legislative changes, especially those specific to your industry. Periodic reviews of local, state, and federal requirements are also key in maintaining compliance. 

Encourage proactive communication about any regulatory changes, and make sure the provider updates their processes accordingly to avoid penalties or legal issues.

Take your time selecting the best outsourcing provider

Rushing into a decision about your payroll outsourcing partner can lead to issues. Take the necessary time to research prospective payroll services thoroughly.

Dig into things like:

• Their reputation
• Customer feedback
• Ability to meet the needs of your company
• Scalability for the future

Request detailed proposals, consider the full range of their services and support, and weigh the costs against the benefits. If feasible, use demos or trials to better understand how their services work in practice, and ask for references from their clients who are in the same industry or of a similar size to your operation. 

Ensuring that the payroll outsourcing provider offers robust and accessible customer support will also give you additional confidence in your choice and help mitigate any issues should they arise.

Final Thoughts

Outsourcing payroll can be a strategic move to streamline payroll operations and ensure accurate employee compensation. By entrusting payroll to specialists, you can mitigate tax and labor law compliance risks while freeing up internal resources to focus on core business activities.

To ensure you benefit from this approach, you’ll need to partner with a reputable provider that can scale to meet your needs.

As a nearshore hiring company, Near presents a simple, fast, and comprehensive solution. When you hire skilled payroll professionals in LatAm through Near, you can gain access to payroll expertise while saving up to 70% in annual salary costs.

Book a consultation with us for free and learn how you can hire a remote payroll expert in under 21 days.

Frequently Asked Questions

What factors should I consider when outsourcing payroll?

When deciding to outsource payroll, consider the provider’s experience with companies in your industry and whether they offer specialized services that cater to the unique requirements of your business. 

Compliance capabilities are crucial. The provider should stay updated on relevant regulations and ensure that your payroll processes are legally sound. 

Assess the technology and tools the provider uses. Are they user-friendly, secure, and compatible with your current systems? Scalability is another important aspect, particularly if your business plans to expand in the near future. 

Customer support quality and availability can significantly influence your outsourcing experience, so choose a provider that offers responsive and knowledgeable support.

How much does outsourcing payroll cost?

The cost of outsourcing payroll can vary widely based on the provider’s location, the service package, your payroll frequency, and the size of your business. It’s also important to consider additional expenses like setup, paycheck delivery, and direct deposit fees.

What other finance services can I outsource?

In addition to payroll, you can benefit from outsourcing various other financial services. Commonly outsourced functions include:

• Bookkeeping
• Accounts payable/receivable management 
• Tax preparation and filing
• Financial reporting and analysis 
• CFO services