Payroll Services for Part Time Workers

[numbersrule]

There have been other threads about cost of Payroll Serviices and they often revolve around Cost per Payslip.

Recently I encountered a company that stated what they could afford as a monthly cost and it worked out at about

£2 per Monthly Payslip

This was for part time workers.

I suppose you would expect that Cost per Payslip should be low for low paid workers.

I'd be interested in Forum views on this. Should such allowance be expected of the bookkeeper?

 

[GLAbusiness]

I suppose you would expect that Cost per Payslip should be low for low paid workers.

Why?

 

[fisicx]

Why would payroll costs be dependant on the amount you pay the worker?

 

[MyAccountantOnline]

..

I suppose you would expect that Cost per Payslip should be low for low paid workers.

......Should such allowance be expected of the bookkeeper?

Regardless of the level of pay the person processing the payroll has to perform the same tasks so no I dont think it's fair or reasonable to expect a reduction in the fee on that basis.

If you are finding payroll costs too high you could look at dealing with your own payroll.

 

[numbersrule]

Why?

Hi GLAbusiness
I totally get where you are coming from with that question.
As has been said, the processing time is not dependent on the pay levels, so I agree with the premise of your question, why should I charge less just because the Client is paying their staff the minimum wage?
Well, in short, it seems to depend on whether I want the work or not.
The stark reality is that if outsourcing only makes sense at the right price then the Client may decide to do the processing themselves.
I suppose you would say 'then let them process their own payroll'.

 

[numbersrule]

Why would payroll costs be dependant on the amount you pay the worker?

Hi fisicx,
It seems to me that if a business only employs part time minimum wage earners then they are inevitably constrained in the level of overheads they can withstand. This means they may be forced to employ minimum wagers to do the bookkeeping in house. Or the Directors do the payroll themselves in their spare time.

 

[numbersrule]

If you are finding payroll costs too high you could look at dealing with your own payroll.

Hi MyAccountantOnline:
No, it's the other way round.
I am finding that what Clients want to pay for payroll services is too low.
It is me providing the payroll services.

 

[GLAbusiness]

Hi Numbersrule

I can see what you are thinking and it seems to me that it all boils down to your business model.

You could reduce your prices across the board. Can you make a decent profit on that basis.
1. There is no point taking on loss making contracts.
2. The question is not "Do you want the work" it is "can I make a profit on this price model".

You could operate a 2 tier price regime. There are a few things to think about here:

1. Where do you draw the line between the tiers
2. If you have a client on tier one and he decides to increase the pay for a few of his staff how do you go about moving some of his prices to tier two. The client will be thinking that it does not cost you any more to process a payroll for (say) £14 per hour than it did when he was paying the employee (say) £13.50 per hour
3. It makes quoting for you service more complex as you have to ask the client how many staff are in tier one and how many in tier two.
4. You will need to monitor the pay rates for each payroll run to allocate to the correct tier.
5. This could result in fluctuating bill to the client from one run to the next

 

[Bobbo]

It seems to me that if a business only employs part time minimum wage earners then they are inevitably constrained in the level of overheads they can withstand.

I don't think that logic holds completely.

The type of staff a business employs will depend on its business model. For example the hospitality sector will employ a significant amount of people (often students) on part time basis at near minimum wage because the flexibility of a larger pool of workers suits that business. It doesn't mean the business can't afford to pay the going rate for payroll services.

I imagine that company in your original post had simply decided they only wanted to pay £x per payslip. I find it hard to believe somebody has done the calculations as to what could be afforded. What if somebody working 30 hours left and was replaced by two people doing 15 hours each - does that bring down what they can afford per payslip because there's one more payslip??

 

[DontAsk]

I am finding that what Clients want to pay for payroll services is too low.

Perhaps you are attracting the wrong clients?

 

[numbersrule]

Perhaps you are attracting the wrong clients?

In this particular case the Client actually seems like someone I could work with, which has persuaded me to try to help them.

Anyway, since this thread started their imminent new contract has been paused, so all gone quiet now.