What Exactly Is Payrolling? Why Do I Need It?

What exactly is payrolling?

When most people think of when the term “payrolling,” they’re referencing the outsourcing of your company’s paycheck processing. But what’s the other type of payrolling—the kind that will generate cost savings, protect you from co-employment risks, and provide greater flexibility for your organization?

At Acara, we define payrolling as the process of engaging with a temporary worker and placing them on someone else’s payroll. In today’s business climate, many companies are experiencing an increased need for skilled workers who can be called upon on an as-needed basis.

Here are some compelling reasons to pursue payrolling services:

1. Cost-Effectiveness

Everything in business has a cost—a cost that is constantly being measured. So, any CFO knows that the costs of bringing on a full-time employee can add up fast. Benefits—including Social Security, Medicare, state unemployment, healthcare, insurance, and 401(k) plans—can tack on an additional 18% – 20% to a base salary. But by choosing to payroll this resource, your organization won’t be required to cover these expenses; instead, they’ll be covered by the employer of record.

2. Payrolling = Speed

We all know that projects are often time-sensitive, and spending time going through the administrative lag of employee onboarding can waste precious time. By engaging with a payrolling provider, your organization can remove the onboarding process entirely—which will significantly reduce lost time. While your payrolling provider will handle the burdens of these administrative processes, your new resource will be able to hit the ground running.

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3. Day-to-Day Efficiency

As companies look to make their organizations leaner and more operationally efficient, many hiring managers and HR leaders have been forced to take on additional tasks in their day-to-day roles. Once staff members become overburdened, assignments can become neglected and slip through the cracks. Using their valuable time to onboard and offboard employees is probably not the best use of these critical resources. By partnering with a strategic payrolling partner, you’ll eliminate these hassles and allow your HR department to tackle more pressing business concerns.

4. Insulation from Co-Employment Risks

In today’s day and age, organizational compliance has proven critical to overall workplace success. By utilizing a payrolling provider, all payrolled personnel will be known as employees of your employer of record. This will be pivotal in insulating your organization from potential co-employment risks. Utilizing payrolling services can help to solidify employment relationships and eliminate confusion surrounding the resource’s actual employer.

5. Trial Period

Payrolling services enable you to test out your resource on a short-term contract. This will help you examine the quality of their work and determine the value that they provide to your organization. Ultimately, does this individual align with your organization’s mission, vision, and culture? Some payrolling providers like Acara will even offer a free conversion after 520 hours worked, allowing you to bring the payrolled resource on as a direct employee at no cost.

Free Infographic: Employer of Record Workflow


The suite of advantages associated with payrolling services can provide a huge benefit to your organization’s bottom-line. From greater cost savings and increased operational efficiency to protection from co-employment risks and beyond, there’s never been a better time to pursue payrolling some of your temporary employees.

Interested in engaging with Acara as your organization’s payrolling provider? Get in touch with us.

This blog was originally published on January 21, 2016. Updated February 4, 2021.