Outsourcing payroll can feel like a big step. It’s a relief to get some of the admin off your plate – but how much is really taken off, and how much stays with your business?
If you’re weighing up whether to move to a managed payroll service, it’s important to understand the level of control you’re comfortable keeping, and how that translates into the admin you’ll still need to handle in-house.
A managed payroll service means that an external provider takes on some, or all of the work involved in running your payroll. This can range from just handling payslips and tax calculations, right through to a fully outsourced model where everything from pensions to HMRC submissions is taken care of.
At Phase 3, we work with organisations at all stages of their payroll journey. Some want full control with a bit of extra help; others prefer a hands-off approach that frees up internal time completely. Here’s what you can expect in terms of admin at each level of engagement.
For companies that want to retain visibility and control but remove some of the more technical or repetitive elements, a light-touch managed payroll service offers a good solution. In this model, your provider may handle tasks like payroll calculations, statutory deductions, reporting, and end-of-year processing, giving you the assurance that the complex parts are taken care of accurately and in line with legislation.
There will however still be responsibilities that your internal team need to manage. These typically include gathering and inputting payroll data such as timesheets, absences, or employee updates, and responding to internal staff queries. You’ll also be responsible for signing off the final payroll before payments are made. This approach suits businesses that already have HR or finance resource in place and want to retain a level of oversight without managing everything themselves.
At the other end of the spectrum, a fully managed payroll service takes almost everything off your hands. Providers like Phase 3 manage the entire process end-to-end, including data processing, HMRC and pension submissions, payslip distribution, BACS payments, and compliance. This level of support is particularly valuable for companies looking to streamline their operations or reduce the risk of errors and penalties, without having to hire in-house expertise.
With a fully managed service, your internal admin is kept to an absolute minimum. Typically, your team’s involvement is limited to informing your provider of any changes, which can often be done automatically if you’re using integrated HR systems. You may also need to approve the payroll before it’s finalised, but that’s about it. This model works well for businesses without dedicated payroll expertise in-house or those aiming to free up time for strategic tasks.
Many businesses fall somewhere in between. You might want to outsource core payroll processing but retain responsibility for specific elements, such as employee data entry or approval workflows. Or perhaps you only need managed payroll support for a segment of your workforce such as temporary or hourly-paid staff. In these cases, a flexible, scalable service is ideal.
At Phase 3, our managed payroll solutions are designed to adapt as your business evolves. Whether you’re experiencing rapid growth, navigating seasonal peaks, or going through internal changes, we work alongside your team to deliver the right level of support – no more, no less. This flexibility ensures you maintain the right balance between external expertise and internal control, without adding unnecessary complexity or cost.
To decide which model suits you best, start by evaluating your current payroll process. Are internal resources stretched? Do you feel confident about compliance and reporting? Are manual errors or delays affecting employee satisfaction? If these sound familiar, a managed service could offer welcome relief.
Outsourcing your payroll doesn’t mean losing control, it means working smarter. Whether you want to reduce admin or offload the entire function, a trusted provider like Phase 3 can help you make the shift smoothly.
Every business is different, and your approach to payroll should reflect that. At Phase 3, our managed payroll services are built around your needs, combining expert support with flexible delivery.
Simply get in touch to see how we can help lighten the load.
Assad founded Phase 3 in 2004 and is responsible for the strategy, growth and finances of the business.
