Handling the payroll is not an easy task especially if you are only a startup or a relatively new company.
There are a lot of tasks to complete in respect of this such as calculating the employees’ gross and net salary as well as factoring in government deductions and taxes.
In addition to this, the HR department needs to perform its regular, difficult strategic duties to fill vacant positions and expand the company.
1) It saves time
Outsourcing your payroll can save a lot of time for your HR team. Pay runs are a constant responsibility they have to do daily, biweekly, or monthly.
Freeing them of this task enables them to focus on creating core business strategies. For example, they can create a motivational programme for employees, address their concerns, and hire great workers to benefit the company because they would have more time to do so.
2) It lowers your expenses
Unless you only have a few employees, we recommend engaging a third-party payroll service.
This can reduce your expenses since you don’t have to pay the employee for extra hours rendered. You don’t also have to keep recruiting and re-training new HR employees who will handle the payroll.
Furthermore, there’s no need to buy and renew your subscription for expensive payroll software and cloud security, as the outsourced provider has them already.
3) Prevent accounting mistakes
The last thing you want is to miscalculate the salary of your employees due to new statutory laws and tax compliance. That would cause issues in the workplace and be hard and take time to resolve.
Typically, in Malaysia, the salary should have deductions from these companies: Social Security Organisation (SOCSO), Employees’ Provident Fund Organisation (EPF), Employment Insurance Scheme Centre (EIS), and Human Resource Development (HRD Corp).
Furthermore, not following the updated payroll formula, your company could pay a hefty fine.
But getting a third-party payroll service can effectively prevent these problems.
4) It gives you expert access
If your company is working across multiple cities or states in Malaysia, you would need to adjust your payroll based on the location’s specific employment law or regulations.
By relying on an outsourced payroll staff, those will be handled for you to ensure a correct salary calculation. And if ever a complex issue surfaces, they will also be able to deal with it easily given their knowledge and experience.
5) It secures your employees’ data
Leaving your pay runs to an in-house employee is risky because they can manipulate them. That means you can pay more expenses without actually being aware of what’s happening.
Second, backing up and securing the personal data of employees require a lot of time and work. Without them, your data can be hacked or lost, and you won’t have anything to check the payroll against.
All of these dilemmas can be solved by hiring a reputable payroll specialist. They also comply with the Personal Data Protection Act 2010 in Malaysia, ensuring your payroll data is safe and secure for your workers.