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How to Choose the Best Payroll Service Provider for Your Staffing Firm

Staffing agencies have unique needs when it comes to processing payroll, which is why many use an outsourced provider. Using a professional payroll service rather than an in-house accountant could save your staffing agency time, money, and legal issues. Take a further look at the advantages and best providers out there if your staffing agency struggles with making payroll.

While you get paycheck generation services from every payroll company, you should note that not all of them are the same. Some PSPs (Payroll Service Providers) can arrange your taxes, too, but you will sign and file them. A reporting agent, or RA, can provide all the same services as the PSP but will sign and submit your tax forms for you.

The third alternative would be a professional employer organization or PEO. POE is a type of full-service human resource management company. A PEO can take-over payroll and filing of tax returns along with other managerial responsibilities like onboarding. This is an expensive alternative. As a result, you are making the PEO only worth looking into if you have multiple back-office operations that you want an outsourcing firm to handle.

How to Choose the Best Payroll Service For a Staffing Agency

You will have many options to consider before choosing a payroll service for your staffing agency. Think about how much control you want to maintain over payroll and tax filing. How should W-2s be processed? Is the PSP going to function like a co-employee? Alternatively, will you continue to control the bulk of your operations? For some staffing agencies, the solution might even be as simple as an upgrade in accounting software to include payroll functions.

Start by creating a list of needs for your staffing agency by asking yourself these questions:

  • Does the payroll company also handle tax filing?
  • Would you want comprehensive reports sent to you?
  • Do you need the PSP to manage benefits packages?
  • Will they help in recruiting workers?
  • Are you planning on providing a 401k plan to employees?

Your list of answers should give you an idea of the type of package you will be excellent for your needs. Once narrowed down, you can start to compare prices. The pricing can either be charged monthly or by the number of paychecks generated. This is of particular concern for a staffing agency as the amount of payroll can change dramatically from week to week. Also, look into fees for adding a new person to the payroll or hidden costs labeled as “processing” fees.

If you have already invested in software for your payroll service, then check to see how well a service provider can integrate with it. Some will allow you to grant access only to particular data stored, while others may open all of your business affairs to the outsourcing provider. If your payroll needs are straightforward, then this could be the step where you recognize that investing in a more comprehensive computer program is your best option.

The last step in choosing a payroll provider is to examine their reputation and customer service. A thorough investigation can be done by reading reviews and asking for referrals. Call the customer service department and ask questions to know what it’s like working with them.

The Best Payroll Service Companies for Staffing Agencies


Also known as QuickBooks, Intuit is one of the oldest accounting programs still in use today. They are famous for their excellent tax return assistance and have incorporated payroll generation as a part of the package. If you are already using Intuit to generate invoices for your clients, then signing on for payroll services will be a smooth integration.


Paychex is another online option that allows you to keep payroll responsibility in-house. However, this does not require an accounting expert to do it. If your needs are relatively small, and you have the time to input and review data, then this is an affordable option for smaller businesses.


ADP has a strong reputation for providing quality payroll services. They serve companies across all industries, including staffing agencies. The price may be a bit higher than other solutions, but their multiple tools and services will be worth it if you are looking to save time.


With PayUSA, you are going to have more flexibility. They can support organizations of up to 1,000 employees, and provide you with options for handling hourly and contract wages.

The cost of payroll outsourcing has decreased dramatically over the last few years. Mostly because of the availability of online resources for business owners. If this part of your staffing business, you’d rather leave to someone else, then choose a company that can meet your expectations.

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