The advantages and disadvantages of payroll
Guest blog by Colinda Vlastuin van Verdo Works
Due to the new labor market, more and more employers are seeing the benefits of payrolling. It is a time when resources have to be used smarter and more creatively to achieve results, which is why there is a greater need for flexibility from staff. However, entrepreneurs may still be hesitant to opt for Payroll. That is why we have listed the pros and cons for you.
What is payroll?
Payroll means that the obligations of employership are handed over. The payroll organization takes over the payroll administration and legal employership of the company where the employee works via an assignment agreement. When you as an employer choose to use payroll, you outsource the following activities:
- Drafting and managing employment contracts
- Paying Salaries
- Create and manage annual statements
- Track and process collective labor agreement changes
- Create, send and manage payslips
- Pension accrual
- Finding out and following dismissal procedures Pension accrual
- Paying payroll taxes, insurance and premiums
- Carry out leave and absence procedures.
- Relaxed business: A payroll organization takes over almost all the employer's risk from the employer. This gives you as an employer more financial peace and security.
- Continued payment in case of absenteeism: If an employee is unable to work due to illness, the payroll organization will pay these hours to the employee. The costs of this are not charged to the employer.
- Flexibility: Payroll gives you the opportunity to deploy staff flexibly. Employers can use flexible contract forms with which the number of employees can be adjusted to the work that is available. If there is less work, the staff can also be scaled down without worry.
- Advice on human resources:Not only the personnel administration is taken over, it is also possible to get advice on personnel matters. Human resources often involve more than just administration. Employers can often turn to the payroll organization with difficult questions or for non-binding advice.
- Less bond with company: If an employee is hired through a payroll organization, he or she may have much less bond with the company of the hiring company. This way of paying allows them to feel more distance and experience less appreciation.
- Higher costs: The costs of payrolling differ per payroll organization. Almost every company starts from the gross salary of the employee who comes to work for you, plus a surcharge. The amount of that storage is determined with a conversion factor. The amount of the conversion factor differs per company, so read the conditions of the payroll organization carefully.
- Employer Obligations: Some employees believe that payroll is used by employers to avoid employer obligations. A payroll company is involved in many activities such as illness and reintegration, providing information and offering other benefits such as a group discount with a health insurer.
NEN 4400-1 certification from SNA
When you consider using payroll, it is wise to orientate whether a payroll organization has the right certification. When a payroll organization has a quality mark from the Labor Standards Foundation (abbreviated: SNA), you can be sure that you are dealing with a reliable party.
The temporary employment sector and companies that make frequent use of temporary workers have jointly drawn up the set of requirements that companies must meet. An employment agency is eligible for the NEN 4400-1 certificate if it meets these requirements. The NEN 4400-1 certification sets requirements that have to do with personnel and payroll administration, among other things. The aim of this is to make the hiring and outsourcing of labor more fraud-resistant.
The companies with an SNA quality mark are assessed on the following NEN 4400-1 requirements:
- Identification of the companies;
- Correct declaration and payment of payroll taxes and turnover tax to the tax authorities
- Whether the wage payments are in order with regard to the Minimum Wage and Minimum Holiday Allowance Act;
- An identity check and a check whether the organization is authorized to perform work in the Netherlands;
- Whether the organization has any fines arising from the outsourcing or outsourcing of work;
All these requirements ensure that the payroll organization is a safe and reliable organization to work with. In short, it is very important to be sure that a payroll organization has this certification!