Summary
Choosing a payroll outsourcing partner is about more than just price. With 15 specific questions on responsibility, quality, data security and collaboration, you can assess whether a supplier is the right fit for your business – before you sign on the dotted line.
Short answer
Choosing a payroll outsourcing partner is not just about price. The right questions uncover responsibility, quality, collaboration and risk. This checklist will help you assess whether a supplier is right for your business - before you sign.
If you’re still trying to decide whether to outsource at all, start by 10 good reasons to outsource payroll and The 7 most common mistakes when outsourcing. Once the decision has been made, use the questions below when discussing the matter with each supplier.
How to use the checklist
Take the list with you to your meeting with each supplier and ask for specific answers – not promises. The best payroll outsourcing partners will give clear, unreserved answers because they have a firm grasp of the processes. Vague or evasive answers are an answer in themselves. You don’t need to ask all 15 questions to everyone, but use them to compare suppliers on what matters most to you: accountability, quality, data security and collaboration.
1. What exactly is included in your payroll outsourcing service?
Get clarity:
- Which tasks are included in the price?
- What are add-ons?
- What is expected of the company itself?
Lack of clarity here is one of the most common causes of dissatisfaction.
2. Who is responsible if there is an error in the payslip?
Ask directly:
- Who is liable to employees and authorities?
- When is the supplier responsible?
- How are errors handled in practice?
Responsibilities must be clearly defined in the agreement.
3. How do you deal with collective agreements?
If the company is covered by a collective labour agreement:
- Does the supplier have experience with the specific collective agreement?
- How to ensure correct interpretation and updating?
Collective labour agreements are one of the most complex areas of pay.
4. What payroll system do you use – and can it be integrated?
Clarify:
- Which payroll system is used?
- Can it integrate with time tracking, finance or HR systems?
- Who owns the data?
System choice has a big impact on collaboration.
5. How do you safeguard against errors in your configurations?
Ask a question:
- Test at startup
- Approval of setups
- Continuous monitoring
Many errors occur in the initial setup.
6. What do you expect from us as a company?
A good outsourcing partner is clear about:
- What data the company needs to provide
- Deadlines
- Roles and responsibilities internally
Outsourcing works best as a collaborative effort.
7. How are changes and ad hoc queries handled?
Ask:
- How do I report changes?
- How quickly do you respond?
- Is counselling included?
Salary is rarely static.
8. How do you deal with illness, holidays and absences?
Clarify:
- How is absence recorded and calculated?
- How are maternity, sickness and holidays handled correctly?
This is a classic failure area.
9. How do you approach data security and the GDPR?
Payroll data is sensitive. Please ask:
- How is data protected?
- Who has access?
- Where is data stored?
Data security should be well documented. The rules are laid down in the GDPR, which Data Protection Authority supervises.
10. Do we have a designated contact person?
A permanent contact person:
- Reduces misunderstandings
- creates continuity
- for better collaboration
Also ask what happens in case of illness or holidays.
11. How are payroll runs and calculations documented?
Clarify:
- What documentation is provided?
- How can the organisation monitor and control?
Documentation is important for doubt, control and audit.
12. How do the start-up and transition phases work?
Ask:
- What does the onboarding process look like?
- How long does it take?
- Who is responsible in the start-up phase?
A good start is crucial for the rest of the collaboration.
13. Can we switch suppliers again – and how?
It's important to know:
- Termination terms
- Access to data
- Transfer in the event of probate
It’s reassuring to know the exit terms. Read more about how a change of payroll provider takes place in practice.
14. How do you deal with changes to the law?
Ask:
- How are we informed about changes?
- Who ensures correct implementation?
- Is counselling part of the deal?
Legislation is constantly changing.
15. How do we assess whether the collaboration is working?
Clarify:
- Is there an SLA?
- Follow-up and evaluation
- Possibility of adjustment
Good collaboration should be measurable and adjustable.
Choose the right payroll outsourcing partner
The right payroll outsourcing partner is not necessarily the cheapest - but the most transparent, experienced and collaborative. By asking the right questions from the start, you reduce the risk of mistakes, misunderstandings and dissatisfaction.
If you’d like to see how we value collaboration and recognition, you can read more about our outsourcing of payroll administration.